By Toby Lewis
Like many sports leagues, as in recent years, it seems inevitable in 2015 that the most active group in corporate venturing will be one of two names, which have both vied for this title since Global Corporate Venturing began tracking the industry five years ago. Either Intel or Google will end up being the most active corporate by the number of investments made in venture deals, being the only groups to have done more than 90 deals this year (see most active in 2015 graph, based on deals tracked by Global Corporate Venturing Analytics as of December 5, 2015).
International Data Group and Qualcomm both remain in the top four most active (Qualcomm was third most active in 2014, while IDG was fourth). Salesforce has increased its activity markedly on 2014, rising to fifth most active, up from fourteenth most active last year.
In a reflection of marked activity by Asian groups, Softbank and Tencent were both in the top 10 by number of deals, while Alibaba was the 12th most active.
This marked activity by the top groups reflects a wider increase in corporate venturing activity generally. As PricewaterhouseCoopers and the NVCA’s Moneytree Report, based on data from Thomson Reuters, shows in this issue of The Corporate Venture Connection, corporate venture groups participated in 20.5% of all deals in the first three quarters and accounted for 13.6% of all venture dollars deployed to startups in the year.
Reflecting wider trends in the venture market, later stage deals have seen the biggest increase in size during 2015. The median value of corporate-backed E rounds and above has risen to $75m, up a whopping 87.5% on last year. At the same time D rounds are up 40% on last year to a median $42m. In contrast corporate-backed C rounds are up by 16.7%, while median A and B rounds have only increased in size by single digit percentages.
Corporate venturing activity may also be hitting a bump in the road. With one month to go in the fourth quarter it looks probable this will be the least active three months by number of deals since the third quarter of 2014 (see quarterly deal activity since January 2014). Recent hand-wringing about the sharp increase in valuations for high growth companies, may finally be hitting activity, although it has to be noted investment activity since the beginning of 2014 has been frenetic.
Toby Lewis is an Editor at Global Corporate Venturing and a frequent contributor to the NVCA Corporate Venture Connection.