THE RISE OF THE CORPORATE VC
Good morning, Term Sheet readers.
Corporate investment funds broke records in 2018.
Corporate venture capital refers to the type of funding where corporations buy into startups through an investment arm. For instance, Microsoft invests through its venture subsidiary called M12, Baidu invests through Baidu Ventures, and Alphabet invests through GV.
If you’re a regular Term Sheet reader, you’ve undoubtedly seen these names pop up in the VC section below. As it turns out, 2018 reached historic highs for corporate venture investments. According to a CB Insights report, corporate VCs poured $52.95 billion across 2,740 deals.
Here are a few other interesting takeaways:
• There are more corporate investors popping up: A total of 264 new corporate VCs invested for the first time in 2018. This is up from 35% from 2017. Some of the new investment arms include Coinbase Ventures, Maersk Growth, and Porsche Ventures.
• Corporate VCs are big spenders: The average corporate venture deal size was $26.3 million, compared to $21.8 million for the standard VC transaction (which did not include corporate VC participation).
• GV (Google Ventures) was the most active: Alphabet’s investment arm GV invested in more than 70 different companies in 2018. They included Alector, Brandless, Collective Health, GitLab, Lime, and Intercom. Salesforce Ventures was the second most active.
• CapitalG invested in the most unicorns: CapitalG (Google Capital) was the most active investor in companies valued at more than $1 billion. Its investments in 2018 included Convoy, Oscar, UiPath, Crowdstrike, and Manbang.
• Corporate VC investment in Asia may overtake North America: Asia attracted 38% of all corporate VC deals in 2018, which is up 31% from 2017. In the third quarter last year, Asia overtook North American deal share for the first time. Also, funding to Chinese companies grew 51% in 2018.
• Two of the top 5 most active corporate VCs were Chinese: Keep an eye on Baidu Ventures and Legend Capital as they made the top 5 most active investment arms after GV, Salesforce Ventures, adn Intel Capital.
‘A SLOW-BURNING MESS:’ Mithril Capital, a late-stage investment firm co-founded by Ajay Royan and Peter Thiel, is embroiled in drama and disarray, according to a new report by Recode. From the investigation:
The firm’s troubles have disappointed Silicon Valley’s highest-profile investor, according to multiple people close to Thiel, who has lent his brand name to the firm but is not operationally involved. And it has left a long list of scorned parties, slowly shrinking the firm’s headcount of investors — despite having more than $1.3 billion in assets under management.
• Redis Labs, a Mountain View, Calif.-based open source home and commercial provider of Redis, raised $60 million in Series E funding. Francisco Partners led the round, and was joined by investors including Goldman Sachs Private Capital Investing, Bain Capital Ventures, Viola Ventures and Dell Technologies Capital.
• SendBird, a San Francisco-based customizable chat and messaging API service for mobile and web applications, raised $52 million in Series B funding. ICONIQ Capital led the round, and was joined by investors including Shasta Ventures, August Capital, Y Combinator, and Funders Club.
• Alan, a Paris-based digital health insurance platform, raised €40 million ($45 million) in Series B funding. Investors include Index Ventures and DST Global.
• nsKnox, a provider of corporate payment protection solutions, raised $15 million in Series A funding. Viola Ventures and M12 co-led the round.
• Vicarious Surgical, a Charlestown, Mass.-based developer of virtual reality software for minimally invasive surgery procedures, raised $10 million in funding. Gates Frontier led the round, and was joined by investors including Khosla Ventures, Innovation Endeavors, AME Cloud Ventures and Marc Benioff.
• Autolabs, a Berlin-based voice AI-enabled digital assistant for in-car usage, raised 7 million euros ($7.9 million) in funding. Investors include nbr Tech Ventures, VC Fonds Technologie Berlin managed by IBB Beteiligungsgesellschaft mbH, coparion and Target Partners.
• Nuweba, a fast and secure serverless platform, raised $4.8 million in seed funding. Investors include Magma Partners and Target Global.
• NormShield, a McLean, Va.-based provider of cyber risk scorecards for enterprises, raised $3.5 million in seed funding. Glasswing Ventures led the round.
• COFE App, a Kuwait-based coffee-centric marketplace app, raised $3.2 million in funding. KISP Ventures led the round.
• HiHello, a Palo Alto, Calif.-based developer of a digital alternative to business cards raised $2.5 million in seed funding. Investors include August Capital, K9 Ventures and TenOneTen Ventures.
• 3DEN, a New York City-based network of pay-as-you-go urban spaces, raised $2 million in seed funding. Investors include b8ta and Graphene Ventures.
PRIVATE EQUITY DEALS
• Beecken Petty O’Keefe & Company made a majority investment in Health-E Commerce, a parent company of pre-tax health and wellness shopping sites. Financial terms weren’t disclosed.
• eraso Technologies Inc., a fabless semiconductor company specializing in the development of integrated circuits for the 60 GHz wireless marketplace, raised $42 million in funding. Investors include Roadmap Capital.
• Energy Impact Partners invested up to $20 million in Palmetto Clean Technology, a Charleston, S.C.-based clean technology software and fulfillment platform company. Financial terms weren’t disclosed.
• Chart National LP made an investment in Sequoia Holdings, a Reston, Va.-based provider of software and cloud engineering services for the U.S. intelligence community. Financial terms weren’t disclosed.
• Coinbase acquired Neutrino, a blockchain intelligence startup. Financial terms weren’t disclosed.
• Mercer Global Advisors Inc. acquired Arbor Asset Management, an Ann Arbor, Mich.-based wealth management firm. Financial terms weren’t disclosed.
• SoYoung, a Chinese plastic surgery app, filed for an IPO to raise roughly $300 million in the U.S., Bloomberg reports citing sources. Tencent and Apax Partners back the firm. Read more.
• Kaleido Biosciences, a Lexington, Mass.-based Phase 2 biotech creating microbiome therapies for genetic disorders, plans to raise $100.8 million in an IPO of 4.8 million shares priced between $20 to $22 apiece. It has yet to post a revenue, and posted loss of $61.7 million in 2018. Flagship Pioneering (67.5% pre-offering) backs the firm. Goldman Sachs, J.P. Morgan, and Morgan Stanley are underwriters. It plans to list on the Nasdaq as “KLDO.” Read more.
• OpenGate agreed to acquire SMAC, a France-based manufacturer of waterproofing and building envelope solutions, from Colas Group. Financial terms weren’t disclosed.
• GN Group will acquire Altia Systems, a Cupertino-based video-conferencing deveice and software developer, for $125 million. Altia had raised approximately $26.6 million in venture funding from investors including Intel Capital and Naya Ventures.
FIRMS + FUNDS
• Future Ventures, a San Francisco-based venture capital firm, raised $200 million for its inaugural venture-capital fund.
• Inovia Capital, a Canada-based venture firm, raised $200 million for its fourth early-stage fund and $400 million for its growth-stage fund.
• Waud Capital Partners promoted Justin DuPere, Christopher Graber, Timothy Lawler and Phillip Olson to partner and Kyle Lattner and Paul Sutphin to principal.