The 5 Biggest Corporate VC Events of 2017
This is the first of what will be a regular blog on corporate venture capital from INV Global. INV looks forward to engaging with readers to find ways to enhance and develop our content. Our goal, in the end, is to further corporate VC, which we know to be a primary driver of innovation in global business.
Corporate venture capital continues to account for more investment funding in startups.
For instance, in the first half of 2013, corporate venture investors (CVCs) participated in about 15% of all venture deals, according to CB Insights. But by the second quarter of 2017, CVCs participated in 17.6% of global funding rounds, according to KPMG Enterprise. That may seem like a modest gain, but it represents a steady rise in an inherently risky ecosystem.
So what drove CVC in 2017? Here are the 5 biggest corporate venturing events of 2017, in no particular order:
1. Google Launches Gradient Ventures
Google launched Gradient Ventures in July, a venture fund that was created provide technical mentorship and early-stage financing to startups focused on AI. The new entity is led by founder and managing partner Anna Patterson. Gradient’s portfolio already includes Algorithmia, a marketplace for algorithms and functions, and CAPE, the developer of a platform for flying drones remotely.
2. Salesforce Launches Several VC Funds
In early May, Salesforce Ventures launched its fourth fund with Salesforce Platform Fund, with $100 million to invest in startups that building transformative apps and components on the Salesforce platform. This vehicle followed up the successful conclusion of Salesforce’s $50 million Lightning Fund. Also last May, Saleforce established a $50 million vehicle called the SI Trailblazer Fund to focus on cloud consulting companies, particularly those that complement Salesforce’s platform. And if that wasn’t enough, Saleforce ponied up another $50 million in September to fuel a fund focused on AI-driven startups using Salesforce. Most recently, Salesforce Ventures launched in October yet another $50 million vehicle called Impact to invest in companies using Salesforce technology that address challenges across workforce development, equality, sustainability and the social sector.
3. SoftBank Vision Fund Kicks Off
Although SoftBank’s $100 billion — with a “B” — Vision Fund was announced in October 2016, it didn’t get its funding legs until this year. Last May, the CVC announced that it had $93 billion in cash for its $100 billion fund for technology firms and start-ups in the US, Europe and Asia, including India. The Vision Fund, which is the largest-ever funding vehicle dedicated to technology investments counts SoftBank, the Public Investment Fund of the Kingdom of Saudi Arabia, Mubadala Investment Co. of the United Arab Emirates, Apple Inc., Foxconn Technology Group, Qualcomm Inc. and Sharp Corp. as investors. And since its launch, the fund continues to garner significant attention for every investment it makes including Uber, WeWork, Nvidia, and most recently Lemonade, an insurance startup.
4. Corporate VC Investments Reach Peak In Europe
According to KPMG’s “Venture Pulse” report, released in the second quarter, corporate venture capital participation in European deals has culminated in a “decade high” of activity. Interestingly, Europe saw a pullback in the number of VC deals overall during 2Q17, with seed and early stage deals plummeting. But in order to prevent disruption from innovative technologies, business models or both, corporations and their venture groups are fending off threats by being more active than ever. “Whether pure-play financial or strategic or a blend of both, such motivators continue to impel growing corporate involvement, particularly as certain key technical areas such as artificial intelligence continue to showcase more and more useful business applications,” the report said.
5. CVCs Invest In Blockchain
“Blockchain” was the hottest buzzwords for 2016, but the interest surely has not died down and has only managed to garner further attention from corporate VCs. ConsenSys, a venture production studio focused on building and scaling tools and enterprise software products powered by Ethereum, launched its own VC arm, ConsenSys Ventures, in September. The $50 million fund will invest pre-seed and seed capital to blockchain startups. Meanwhile, Robert Bosch Venture Capital, the CVC of the Bosch Group, purchased this month a significant amount of IOTA tokens, one of the largest cryptocurrencies in the world. In doing so it hopes to intensify the collaboration with the IOTA Foundation, an open-source non-profit foundation from Germany. And in March, Verizon Ventures, Intel Capital, JetBlue Technology Ventures, and CME Ventures all invested in Filament, a provider of wireless industrial networks leveraging blockchain technology in its decentralized network stack.
