Corporate Venturing Fueling Innovation

Trends Report

Globally, corporate venturing continues to grow and drive innovation It’s a good thing. Corporations are realizing the value of investing in outside technologies, and technology scouts are uncovering market adjacencies. Corporate Venturing is now a big part of an organization’s innovation strategy. It also means less low-hanging fruit. The amount of exploitable technology continues to grow at an extraordinary rate. However, so does the number of firms looking to capitalize on the next big thing. Fierce competition with larger investments requires execution excellence. Several recent studies confirm the trend. We have put together some of the more interesting facts regarding both the growth of Corporate Venturing programs and the potential threats to existing operations. Fear not! There is an upside since firms with a systematic approach will have a competitive edge.

2X Growth Corporate Venturing Units Worldwide

The number of global Corporate Venturing units has doubled in the last 5 years to 1,100

Deals  &  Investment  Growth  

Source: Thelander 2014 CVC Report

“Corporate venture capital investment amounted to 1,068 investment deals worth $19.6 billion in 2013. The overall venture capital industry has been estimated at$48.5 billion in 2013… which would make corporate venture capital involved in nearly 20% of deals, covering 40% of transaction value.” 

Lots of deals

Source: Volans Ventures Ltd, Investing in Breakthrough Corporate Venture Capital, 2014

Source: CB Insights: Evaluating the Effectiveness of CVC in Tech 2014

R&D budgets have tightened despite continued pressure to bring new technology to market quickly. Capital investment in High Tech firms continues to grow as companies look to out-innovate the competition. These investments offer proof of concept vehicles to help firms pivot dexterously.

High Tech Investment to Out Innovate Competition

Deal Size Bigger Bets = Bigger Stakes

The stakes for Corporate Venturing are higher than ever before as the average deal size is now over $23M. Greater scrutiny will be placed as these larger investments must show their value.

Source: CB Insights: The 2014 US Corp VC Year in Review

Why is Uber the largest raise?

Internet Based

Mobile Tech

Healthcare

Source: CB Insights: The 2014 US Corp VC Year in Review

Company Amount ($M)

Cloudera $900

Survey Monkey

$250

Flatiron $130

Slack $120

DataStax $106

Company Amount ($M)

Uber $1,200

TangoMe $280

Instacart $220

NantMobile $50

Kony $50

Company Amount ($M)

Naurex $80

Viamet Pharma

$60

Aduro Bio $55

Coherus $55

Syros Pharma

$53

The data shows corporate venturing is growing by number of venture units, number of deals, and deal size. Moreover, there is an increased focus on high tech investments. That means more competition for the technologies that matter most. Riding the wave will require a keen eye, a quicker hand, and systematic tools to get the job done right.

Sink or Swim

You can make your investments count by using systematic tools. •  Expedite deal flow •  Rigorously and consistently evaluate opportunities •  Optimize portfolio performance Learn more about how Wellspring can help at wellspring.com/contact-us

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