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On Wednesday, BBC Ventures — the two-year-old VC arm of the UK broadcaster — announced its first investment. It’s not the only new-ish venture arm of a media organisation; the Financial Times also launched FT Ventures (an investor in Sifted) earlier this year. French nuclear multinational Orano is another new entrant to the CVC game; it committed €50m to invest in early-stage startups in March this year.
News of CVC births got me wondering about CVC deaths too.
Most CVCs don’t have a long shelf-life: their median life span is a mere four years, according to business school LBS. The reasons for that are well-trodden. If the parent company has a tough year, or has a change of leadership or strategic direction, the CVC can be one of the first things to get the chop.
Recent victims include British telecoms giant BT’s venture arm, which has stopped making new investments, and UK software and IT services provider Capita’s venture arm Scaling Partner, which has dropped from 16 to 4 employees over the course of this year, according to LinkedIn, and also stopped new investments. The parent company’s share price has also plummeted since January. This year German software giant SAP also shut its CVC arm SAP.io — which has invested in five unicorns and seen 70 exits — although it still invests in startups via VC firm Sapphire Ventures.
Danish shipping giant Maersk is another which has shaken up the focus (and team) of its CVC, Maersk Growth, in the past year. The move came as a new CEO took the helm of the parent company, and thousands of job cuts were announced.
However, for all their flightiness, CVCs are a pretty chunky — and growing — part of Europe’s venture ecosystem.
In 2022 and 2023, CVCs were involved in more than one in five deals — and so far in 2024, the share is only going up, according to PitchBook data.
Corporates and corporate venture arms have invested in 771 deals so far this year, worth a combined €12.31bn. In 2023, CVCs invested in 2,133 deals, worth a combined €26.16bn.
Last year, pharmaceutical giant Novo Holdings was the most active CVC in Europe — doing 32 deals. In a sign of the times, two more of the most active CVCs were connected to pharmaceutical companies, while three were connected to oil and gas behemoths.
Looking at the past five years, the most active CVCs also include the venture arms of high-street banks, tech giants, insurance companies and universities. Leading the pack is Innovationsstarter, IFB Bank Hamburg’s venture arm; it’s done 181 deals since 2018, according to PitchBook. Sabadell Venture Capital, the CVC of the Spanish bank, comes second over the time period; it’s done 102 deals since 2018.
As for the tech giants, Tencent Holdings, Google Ventures, Animoca Brands, Coinbase Ventures and Salesforce Ventures have all done more than 50 deals in the past 5 years. Several insurance firms’ venture arms are also big backers of startups; UNIQA Ventures (connected to the Austrian insurer) has done 53 deals, while Eight Roads (Fidelity’s venture fund) has done 51.
Are corporate investors one of the answers to Europe’s growth funding gap? Can more be done to divert capital from their balance sheets to startups? Or is that not what the industry needs — or wants? Hit reply.
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Read the orginal article: https://sifted.eu/articles/corporate-venture-capital-invest/
