Benchmarking Corporate Venture Capital

@cbinsights www.cbinsights.com#corpvcdata 1

@cbinsights www.cbinsights.com#corpvcdata

About Our Presenter – Matthew Wong.

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• Research and Data Analyst, CB Insights

• Published research and data analysis have been featured in The New York Times, Wall Street Journal, Financial Times, Bloomberg among other major media outlets.

• TV appearances on Al-Jazeera, Bloomberg TV, and BNN.

• Graduate of Northwestern University with B.S., magna cum laude.

@mlcwong [email protected]

https://archive.org/details/ALJAZAM_20150117_070000_Real_Money_With_Ali_Velshi#start/2880/end/2940

http://www.bloomberg.com/news/videos/2015-02-19/are-uber-s-and-snapchat-s-valuations-justified-

http://www.bnn.ca/Video/player.aspx?vid=631469


IN THE NEXT 35-45 MINUTES, WE’LL COVER…

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Corporate venture capital risingMacro trends in corporate venture capital

Quantifying corporate VC within ventureHow big is the role of corporate venture within the greater venture capital ecosystem?

Where corporate VC is investing The sectors and hot areas where corporates are investing in

Case study – Google VenturesA deep dive inside portfolio and strategy of the most prolific investor in corporate venture. Where is Google looking?

Benchmarking corporate venture fundsComparing corporate VC funds by focus area


CORPORATE VENTURE CAPITAL RISINGMacro trends in corporate venture capital

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VC PERCEPTIONS OF CORPORATE VENTURE CAPITAL VCs have not been shy when it comes to critiquing the role of corporate investors in the venture business.

“Legendary VC Ted Dintersmith of CRV once said to me, about taking capital from strategics, ‘Be careful. You’ll have sold your company. You just won’t know it.’”

- Micah Rosenbloom, Founder Collective, September 2014

“I do think that venture investing is not the best use of a corporation’s capital and that it is inevitable that it will produce sub-par returns at best and significant losses at worst.”

- Fred Wilson, Union Square Ventures, July 2008


CORPORATE VC TODAY: FROM TECH TO HEALTHCARE TO FINANCE TO ENERGY TO MEDIA


2015: CORPORATE VENTURE CAPITAL ON TRACK FOR NEW HIGHSThe first half of 2015 saw corporate venture capital investors participate in 357 deals totaling $7.85B. At the current run rate, corporate VC deal activity in on track to top 2014’s high. Funding dollars involving corporate VC arms has topped $3B in each of the last 3 quarters.


CALIFORNIA STAYS DOMINANT FOR CORPORATE VENTURE DEAL ACTIVITY California has taken 50%+ of all CVC deals in four of the last five quarters. Massachusetts and New York have been swapping positions for the No. 2 spot and saw a nearly equal amount of deal share in Q2’15.

https://www.cbinsights.com/signup.php?utm_source=slideshare&utm_medium=social&utm_campaign=corpvc


CORPORATE VC SEED DEAL SHARE DROPSIn Q3’14 and Q4’14, seed activity made up 1 of every 5 deals done by corporate venture arms. There’s been a significant pullback in 2015. Each of the past two quarters saw seed deals take just 11% of CVC deal activity.


INTERNET DEALS TAKE HALF OF ALL CVC DEALS IN Q2Corporate venture deal share to the Internet sector hit a five-quarter high in Q2’15. Mobile deal share by corporate venture arms has topped that in healthcare in three of the last five quarters.


QUANTIFYING CVC WITHIN VCHow big is corporate venture within the greater venture capital ecosystem?

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CVC DEAL SIZES ARE NOW DECIDEDLY LARGER THAN VC OVERALLAverage deal size with corporate venture participation has topped $21M+ in five of the last six quarters. In contrast, average corporate venture deal sizes stood ≤$17M in 2013.


CORPORATE VCs PARTICIPATE IN 1 OF EVERY 5 VC DEALS IN 2015 Corporate venture firms participated in just over 20% of the 1,768 venture-backed rounds in the first half of 2015. That’s compared to CVCs participating in 15% of venture deals in H1 2013.


NUMBER OF ACTIVE CORPORATE VENTURE FIRMS IS UP 82% SINCE Q1’12106 different corporate VC firms completed an investment in Q1’15 – a multi-year high. That’s a 82% jump from the same quarter three years ago.


38 CORPORATE VCs COUNT A UNICORN IN THEIR PORTFOLIOIt’s not just VCs who are hunting unicorns. Among the 74 US private companies valued at $1B or more, 51% have a corporate venture unit as an investor.

Source: https://www.cbinsights.com/blog/corporate-venture-unicorns/

https://www.cbinsights.com/blog/corporate-venture-unicorns/


THE CORPORATE VCs THAT COUNT THE MOST UNICORNSSalesforce Ventures narrowly edges out Google Ventures for the most investments in US unicorns. 8 different corporate venture groups count 3 or more unicorns.




CERTAIN UNICORNS COUNT MORE STRATEGIC INVESTORS THAN THE RESTDocusign, the e-signature and digital transaction firm, has received backing from a notable 10 corporate venture groups. There are 7 US unicorns with 3 or more corporate venture investors.




KLEINER PERKINS IS MOST FREQUEST VENTURE CAPITAL CO-INVESTOR WITH CVCsKleiner Perkins and NEA are the most frequent co-investors with CVCs since 2010 followed by Andreessen Horowitz.

Source: https://www.cbinsights.com/blog/top-venture-capital-corporate-syndicate/

https://www.cbinsights.com/blog/top-venture-capital-corporate-syndicate/


THE TOP VC FIRMS BY SHARE OF CVC-SYNDICATED DEALSBetween Q1’10 and Q2’15, Kleiner Perkins has completed 29% of its deals with a corporate venture unit. Venrock and DFJ round out the top 3 by share of CVC-backed deals.

Source: https://www.cbinsights.com/blog/top-venture-capital-corporate-syndicate/

https://www.cbinsights.com/blog/top-venture-capital-corporate-syndicate/


CVC Investor Recent New Investments

THE MOST ACTIVE CORPORATE VENTURE CAPITAL GROUPS


APPENDIX: 117 ACTIVE CORPORATE VENTURE CAPITAL FIRMS

1 - 29 30 - 58 59 - 87 88 - 117Google Ventures Dell Ventures kbs+ Ventures Rex Health Ventures

Intel Capital Google Capital Hewlett-Packard Ventures DSM Venturing

Qualcomm Ventures Recruit Strategic Partners Liquidity Ventures Robert Bosch Venture Capital

Salesforce Ventures Liberty Global Ventures Wells Fargo Startup Accelerator Volvo Group Venture Capital

Comcast Ventures Presidio Ventures Fosun Kinzon Capital Xandex Investments

Fidelity Biosciences BBVA Ventures Simon Venture Group ICG Ventures

GE Ventures Time Warner Investments MS Ventures Astellas Venture Management

Bloomberg Beta Amgen Ventures BP Ventures Motorola Solutions Venture Capital

Novartis Venture Funds Novo Ventures dunnhumby Ventures Follett Knowledge Fund

Cisco Investments KDDI Open Innovation Fund Takeda Ventures Applied Ventures

Samsung Ventures Renren Lianhe Holdings GM Ventures Boxer Capital

In-Q-Tel MedImmune Ventures Transamerica Ventures Legend Capital

Microsoft Ventures Total Energy Ventures International BlueCross BlueShield Venture Partners SanDisk Ventures

Pfizer Venture Investments Baxter Ventures UPS Strategic Enterprise Fund Broadway Video Ventures

Bertelsmann Digital Media Investments NTT DoCoMo Ventures Fletcher Spaght Ventures MemorialCare Innovation Fund

Lilly Ventures Telstra Ventures Western Digital Capital Twitter Ventures

Siemens Venture Capital Rakuten Ventures Boulder Brands Investment Group GREE Ventures

Hearst Ventures WuXi Corporate Venture Fund Zaffre Investments UMC Capital

Merck Global Health Innovation Fund Chevron Technology Ventures DMG Information Shea Ventures

Kaiser Permanente Ventures Saudi Aramco Energy Ventures TELUS Ventures Brace Pharma Capital

DG Incubation Constellation Technology Ventures Monsanto Growth Ventures Merck Research Ventures Fund

Verizon Ventures American Family Ventures Link-age Ventures Axel Springer Digital Vetures

Citi Ventures Credit Suisse NEXT Investors T-Venture Castrol innoVentures

Mitsui & Co. Global Investment American Express Ventures Aster Capital WPP Digital

SR One Reed Elsevier Ventures Adobe Ventures Geekdom Fund

Johnson & Johnson Development Corporation Syngenta Ventures MassMutual Ventures R/GA Ventures

CAA Ventures Sanofi-Genzyme Ventures Telefonica Ventures Steamboat Ventures

Roche Venture Fund Karlani Capital E.ON Venture Partners BMW i Ventures

Ascension Ventures SingTel Innov8 First Data Ventures SABIC Ventures

Nissay Capital

117 Active Corporate Venture Capital Investors Q3'14 - Q2'15


WHERE CORPORATE VCS ARE INVESTINGSector-level trends and hot areas


INTERNET CVC DEALS JUMP TO MULTI-YEAR HIGHAfter dropping for three consecutive quarters, corporate VC deals in the Internet sector jumped to a quarterly high in Q2’15. Internet funding with CVC participation hit $2.3B behind several $100M+ deals.


NEW YORK DOMINATES MASSACHUSETTS FOR INTERNET CVC DEAL SHARENew York took nearly 1 of every 5 CVC deals in Internet in Q2’15 and topped Mass. in each of the last five quarters. California’s Internet CVC deal share has remained at 50%+ since Q2’14.


INTERNET CVC SEED DEAL SHARE FALLS IN 2015After topping 20% in Q2’14-Q4’14, corporate VC seed deal share in Internet fell to 11% in Q1’15 and 13% in Q2’15. Series C CVC deal share hit a five-quarter high at 17%.


CORPORATE INVESTMENTS IN MOBILE FALLThe first half of 2015 saw corporate VCs deployed 7% less deals than the same period last year. After Uber’s $1.2B round buoyed Q2’14, mobile funding with corporate participation has stood at $400M+ in each of the last three quarters.


CALIFORNIA STAYS HOT FOR CORPORATE VC DEALS IN MOBILECalifornia has taken over half of all corporate VC mobile deals in each of the past five quarters.


CVC SEED DEAL SHARE IN MOBILE FALLS TO LOWMobile seed deal share by corporate VCs fell to just 8% in Q2’15, after taking 40% of all mobile deals in the same quarter last year. Mobile Series A and Series B deal share both hit five-quarter highs.


CORPORATE VENTURE FUNDING TO HEALTHCARE SEES BIG FIRST HALF OF 2015Healthcare CVC funding hit $1.59B in the first half of 2015, a jump of 35% from H1 2014. Corporate funding participation in healthcare has topped $650M in each of the last three quarters.


HEALTHCARE CVC DEAL SHARE SHIFTS BACK TO CALIFORNIAAfter taking just 19% of healthcare CVC deal share in Q4’14, California activity has risen in each of the past two quarters and hit 35% in Q2’15, topping Mass. after ceding the lead in Q4’14 and Q1’15.


CORPORATE VCs PURSUE FEWER EARLY-STAGE HEALTHCARE DEALSIn Q4’14, Series A deals took half of all corporate VC activity in healthcare. But early-stage share has fallen for the last two quarters as Series A share hit a four-quarter low.


DIGITAL HEALTH / HEALTH IT DEALS BY CVCs JUMP Corporate venture deals into the growing digital health and health IT arena rose 44% between 2011 and 2014.

NOTABLE CVC INVESTORS

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CORPORATE VCs DIVE INTO FIN TECH Corporate venture deals into financial tech or ‘fin tech’ ticked up 75% between 2011 and 2014.


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CYBERSECURITY CVC DEALS HIT HIGH IN 2014As reported threats continue to rise, corporate venture deals into cybersecurity rose 25% on a YoY basis in 2014 and hit a quarterly high in Q3’14.


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CASE STUDY:


JULY 2008: GOOGLE VENTURES REVEALED

“How the group will be structured and what sort of investments it is likely to target is unclear… The Mountain View, Calif., Web giant has long preferred to buy companies rather than invest in them, and has plenty of cash to keep doing so. With an abundance of VC money available today, Google will have to convince entrepreneurs that it has something to offer that other investors don’t.

Source: http://www.wsj.com/articles/SB121747323523899779

- ‘Google to Extend Reach With Venture-Capital Arm,’ Jessica Lessin, July 31, 2008

http://www.wsj.com/articles/SB121747323523899779


THE MOST PROLIFIC FIRM IN CORPORATE VENTURE CAPITALIn 2014, Google Ventures participated in just under 100 new and follow-on deals, the most in any year since its inception. The prolific CVC has slowed its pace in 2015, completing 39% less deals in H1 2015 than H1 2014.

Source: https://www.cbinsights.com/blog/google-ventures-teardown/

https://www.cbinsights.com/blog/google-ventures-teardown/


GOOGLE VENTURES INDUSTRY FOCUS: SECURITY & HEALTH GAIN PROMINENCESince the start of 2014, Google Ventures has placed a large strategic emphasis on cybersecurity (ex. Duo, Ionic, Threatstream, Synack) and a broader push into digital health (ex. Transcriptic, Spruce, Flatiron Health). Companies within the realm of “big data” and data analytics have also been a recent focus area (ex. Rocana, MapD, Cohesity).





GOOGLE VENTURES GEOGRAPHY STRATEGY:INCREASED INTEREST IN NEW YORKMore recently, Google Ventures has identified more opportunities in New York. In 2012 and 2013, Google Ventures participated in 13 NY deals. Since then, Google Ventures has doubled down, completing 16 deals including a $130M investment into Flatiron Health.




GOOGLE VENTURES STAGE STRATEGY: EARLY-STAGE TAKES 65%+ OF DEALSWhile all stages of investment have seen increases over the last five years, the biggest growth has been in the early rounds, with 66% of deals taking place in Seed or Series A rounds over the past five years.




GOOGLE VENTURES – NEW vs. FOLLOW-ON INVESTMENTSAs Google Ventures’ portfolio matured since the firm’s launch in 2009, follow-on investments have surged. Google Ventures completed twice as many follow-on deals as it did new deals in Q2’15 — the highest percentage of follow-on deals it has ever done in a single quarter.




MEGA-FINANCINGS BUMP UP DEAL SIZES BY GOOGLE VENTURESGoogle Ventures has participated in a number of mega-financings — including those to Uber and Cloudera — which have served to drive up the median size of its deals. In Q2’15, Google Ventures’ median deal size swelled to $15M behind large rounds including Cohesity’s $55M Series B.



@cbinsightsJan

2011Jan

2012Jan

2013Jan

2014Jan

2015

Date of Partnership

Google Ventures Largest Deals Over Time Since 2011

GOOGLE VENTURES LARGEST DEALS IN THE HEADLINES

*Selected deals

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ANALYZING GOOGLE VENTURES’ INVESTMENT SYNDICATEGoogle Ventures often does deals with other VC firms such as Kleiner Perkins, SV Angel, and Andreessen Horowitz. Several of Google Ventures’ top co-investors are also among its top deal flow sources, including Kleiner Perkins, First Round Capital, and SV Angel. Y Combinator is a top feeder of deal flow to Google Ventures.



BENCHMARKING CVCSComparing corporate VCs by focus area

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INTEL CAPITAL TOPS CORPORATE VC FIRMS BY EXITSSince the start of 2011, Intel Capital has realized the highest number of M&A or IPO exits followed by Google Ventures.

*Exits by Comcast Interactive Capital since 2011 were counted under Comcast Ventures


CVC InvestorNumber of New Deals Per Year

COMPARING SELECT CORPORATE VCs: TECH

Most Frequent Stage

Median Deal Size

50-60 $8M Seed

$13M10-20

Series B

Series B

Series A$15M20-30

30-40$11M

$15M Series C10-20



COMPARING SELECT CORPORATE VCs: HEALTHCARE

Most Frequent Stage

Median Deal Size

1-10 $17M Series A

$9M1-10

Series A

Series C

Series A$10M1-10

1-10 $14M

$24M Series B1-10



COMPARING SELECT CORPORATE VCs: MEDIA

Most Frequent Stage

Median Deal Size

10-20 $10M Series A

$8M1-10

Series B

Series B

Seed$3M1-10

1-10 $15M

$6M Series C1-10



COMPARING SELECT CORPORATE VCs: FINANCIAL SERVICES

Most Frequent Stage

Median Deal Size

1-10 $19M Series C

$14M1-10

Series B

Series D

Series C$19M1-10

1-10 $28M


QUESTIONS, GETTING UNDERLYING DATA & HELPFUL LINKS

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CVC INVESTOR PROFILES

Investor Profile Link

Intel Capital Investor Profile

Qualcomm Ventures Investor Profile

Google Ventures Investor Profile

https://www.cbinsights.com/i-65ded5353c5ee48d0b7d48c591b8f430?term=intel%20capital

https://www.cbinsights.com/i-b88e569b3666ccbc8e6dfcb5671c9cca?term=qualcomm

https://www.cbinsights.com/i-8613985ec49eb8f757ae6439e879bb2a?term=google%20ventures




Salesforce Ventures Investor Profile

Comcast Ventures Investor Profile

Fidelity Biosciences Investor Profile

https://www.cbinsights.com/i-7800d0f0f334c2321b199f08fbfbe476?term=salesforce%20v

https://www.cbinsights.com/i-0e4f9b51a861eb5a8e419cb96f1087a1?term=comcast%20ven

https://www.cbinsights.com/i-86d7c8a08b4aaa1bc7c599473f5dddda?term=fidelity%20biosc




GE Ventures Investor Profile

Bloomberg Beta Investor Profile

Novartis Venture Funds Investor Profile

https://www.cbinsights.com/i-2cf591de12a0bf62b7416c93688c8e91?term=ge%20ventures

https://www.cbinsights.com/i-0226542688e5dc36cf47b133ef4e7237?term=bloomberg%20beta

https://www.cbinsights.com/i-63538fe6ef330c13a05a3ed7e599d5f7?term=novartis




Cisco Investments Investor Profile

Samsung Ventures Investor Profile

Microsoft Ventures Investor Profile

https://www.cbinsights.com/i-dbfd2cf7057917dab8d9070d88aa2c2c?term=cisco%20investment

https://www.cbinsights.com/i-0226542688e5dc36cf47b133ef4e7237?term=bloomberg%20beta

https://www.cbinsights.com/i-4663bd95f4de11218493533738a71b00?term=microsoft%20ven


COMPANY PROFILES


DocuSign Company Profile

Uber Company Profile

Kabam Company Profile

https://www.cbinsights.com/c-8a0e1141fd37fa5b98d5bb769ba1a7cc?term=docusign

https://www.cbinsights.com/c-4111adec4311b7124dba579e9ba7636a?term=uber

https://www.cbinsights.com/c-bcf0011719876e2150dc6f0f2d27c859?term=kabam


COMPANY PROFILES


FanDuel Company Profile

Lookout Company Profile

MongoDB Company Profile

https://www.cbinsights.com/c-889fbd1aec443cef389ea10c93b498d8?term=fanduel

https://www.cbinsights.com/c-5d95e1b002788032a4a4f4de3f7aac0f?term=lookout

https://www.cbinsights.com/c-bcf0011719876e2150dc6f0f2d27c859?term=kabam


@cbinsights

About Our Presenter – Matthew Wong.

66

• Research Analyst, CB Insights

• Published research and data analysis have been featured in The New York Times, Wall Street Journal, Financial Times, Bloomberg among other major media outlets.

• TV appearances on Al-Jazeera, Bloomberg TV, and BNN.

• Graduate of Northwestern University with B.S., magna cum laude.

@mlcwong [email protected]

https://archive.org/details/ALJAZAM_20150117_070000_Real_Money_With_Ali_Velshi#start/2880/end/2940

http://www.bloomberg.com/news/videos/2015-02-19/are-uber-s-and-snapchat-s-valuations-justified-

http://www.bnn.ca/Video/player.aspx?vid=631469


Web | www.cbinsights.com

Twitter | @cbinsights

Tel | 212.292.3148

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http://www.cbinsights.com/

http://www.twitter.com/cbinsights

Benchmarking Corporate Venture Capital

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