Global Venturing Review of the past week

If society is going to produce the next generation of entrepreneurs then they will have to be nurtured at an earlier age with an eye on the future, editor-in-chief James Mawson argues in an editorial. Entrepreneurs can help out by providing mentorship, but at a deeper level the younger generation need space to be creative and come up with the ideas necessary to start a business in the first place.

PEOPLE

But nurturing the next generation doesn’t mean neglecting the current entrepreneurs, just looking a bit wider for the investors and startups then a narrow set of, mainly, white males.

As first reported on Global Corporate Venturing on Thursday, Intel Capital has chosen Christine Herron and Trina Van Pelt to manage its $125m Intel Capital Diversity Fund, which invests in tech startups led by women and underrepresented minorities, and had an active first half of the year with $308m invested in new and follow-on deals.

As co-heads of the Diversity Fund, Herron and Van Pelt replace Lisa Lambert, who left in May to become managing partner at Westly Group.

In announcing their new roles, Wendell Brooks, president of Intel Capital and head of M&A, said he expected “to announce the Diversity Fund’s latest investment next week”.

Separately, the US trade body National Venture Capital Association (NVCA) issued a report, Building a More Inclusive Entrepreneurial Ecosystem, on the lack of underrepresented groups participating in venture capital and entrepreneurship and provides an overview of diversity and inclusion initiatives in the US.

The report highlighted NVCA members Intel Capital and JumpStart, both of which launched funds dedicated to investing in underrepresented minority entrepreneurs. 

In 2015, 45 NVCA member firms representing $112bn in assets under management and invested in 7,000 companies made public commitments to advance diversity and inclusion in the entrepreneurial ecosystem, including five corporate-backed venture units from GE, IBM, Intel, Johnson & Johnson and SVB.

Sue Siegel, CEO of GE Ventures, in the diversity report said: ““At GE Ventures, we see diversity and inclusiveness as an essential part of our innovation, creativity, productivity and competitive advantage. We take pride in being one of the most diverse corporate venture capital teams in the country.”

Claudia Fan Munce, managing director emeritus of IBM Venture Capital Group and venture adviser of New Enterprise Associates, added: “Corporations have a long history of embracing diversity in their workforce and leadership in order to achieve better business performance, as is clearly reflected in the leadership composition of over a thousand corporate venture groups operating today. As one of those leaders for the past 15 years, I am a big champion of diversity because I believe driving a higher level of performance in the innovation ecosystem can yield even greater impact on people lives.”

Johnson & Johnson said its commitment was for inclusion and diversity for the JJDC team (currently >30% of investors are female and >30% of investors are ethnically diverse).

The NVCA Diversity Task Force was formed in December 2014 by former NVCA board chair Scott Sandell, managing general partner of NEA, and diversity task force co-chairs Kate Mitchell, co-founder and partner of Scale Venture Partners, and Ashton Newhall, managing general partner of Greenspring Associates, focused on improving the diversity of the NVCA board.  

The NVCA Board of Directors is now 38% women or underrepresented minority. By contrast, 11% of VCs are female and 74% are white ethnicity (including 7% who are white female), according to research by Richard Kerby, a vice-president at VC firm Venrock, in the report.

Kerby added: “The data show that the majority of venture capitalists don’t have operational experience or an engineering background. Therefore, it is important to focus on what all of the successful people listed above have in common. They are all intelligent, curious, driven, hardworking and a slew of other positive superlatives. But most importantly, they were given an opportunity to become an investor and access to capital to make investments.”

In other news,  Claudia Iannazzo said she had set up a US-based venture capital firm, AlphaPrime, with a strategic limited partner in an undisclosed European bank.

Iannazzo is managing partner and co-founder of New York City-based AlphaPrime with Alessandro Piol, who helped run US phone operator AT&T’s corporate venturing unit in the early 1990s but for the past decade has been president of Vedanta Capital.

Stéphane Roussel has become managing partner at of Solvay Ventures, the corporate venturing unit of the eponymous France-based chemicals company.

Since 2005, Solvay has managed a “$100m global evergreen fund with a focus on sustainable resources, energy transition, health & wellbeing and digital age,” Roussel said in his LinkedIn profile. 

Troy Williams, former president of publisher Macmillan’s New Ventures unit until August last year, has joined University Ventures as a managing director.

Williams had spent five years as president of Macmillan New Ventures before becoming CEO of its enterprise solutions division until leaving in July to join University Ventures (UV). 

FUNDS

Rozenfeld's new firm targets $30m fund

Climate Impact Capital, the VC firm formed by ex-Shell Technology Ventures president Alexander Rozenfeld, could seek a corporate strategic as one of the fund's LPs. However, Rozenfeld said he had yet to sign up such a corporate LP.

Other corporate venturing fundraising news have had strong Asian ties. Japan-based pharmaceutical company Astellas has formed a joint venture called DigiTx Partners with life sciences venture firm MPM Capital in order to invest in digital health technology. Astellas has been an eager CVC investor in healthcare but has generally restricted its activity to pharmaceutical startups. It will be interesting to see if any of its peers elect to make a similar move to join hardware producers like Qualcomm and GE by investing more heavily in the area.

China-based Alibaba paid some $800m for a 60% stake in ChinaVision Media in 2014, rebranding it as Alibaba Pictures shortly afterwards, and it has since helped to fund blockbusters like the last Mission: Impossible and Star Trek films. Now, Alibaba Pictures is set to go into corporate venturing, providing $75m for a $300m fund that will target strategic investments in companies in partnership with asset manager Gopher Asset.

Another Chinese media player, outdoor advertising company Focus Media, is initiating its own strategic investment activities, raising four $75m funds, each of which will be a collaboration with a different investment firm. Focus, which formed a $400m sports-themed fund with Fontanalis Partners in April, is putting up half of the capital for each of the entities.

My Home looks to construct $75m fund

The India-based conglomerate is aiming to raise an initial $15m for the fund, following the creation of a dedicated department to identify opportunities.

Siam Commercial Bank forwards corporate venturing plans

SCB's Digital Ventures unit has announced its plans to set up a corporate venturing arm, an accelerator and a research and development unit.

Corporates okay second KK Fund

Sega Sammy and Septeni have supported KK Fund's second vehicle, which will focus on early-stage startups across Southeast Asia, Taiwan and Hong Kong.

University Corner:

NYU computes AI accelerator

NYU's Tandon School of Engineering has partnered FF Venture Capital to launch an accelerator program aimed at the artificial intelligence sector.

SNé attracts $2.5m

Commercialisation firm SNé, which has partnered several Israeli universities, has raised its first funding round to help it become a centralised tech transfer office in the country.

New Zealand researches $150m Australian fund

Otago University, Malaghan Institute and Callaghan Innovation have joined the fund, which already includes more than 50 Australia-based research institutes and hospitals.

Government Department:

Taiwan upgrades economy with $3.1bn

The country's National Development Fund has allocated $3.1bn to investments in domestic companies in order to leverage private sector commitments.

Big deal: German startups to benefit from $1.1bn

Germany's Economic Affairs Ministry and the European Investment Fund have joined forces to provide an additional $1.1bn to two successful venture capital instruments.

Flanders helps expand IoT fund

ImecXpand, an internet of things-focused fund with a target size of $110m, has attracted a $33m commitment from the government of Flanders.

EXITS

India-based online fashion retailer Jabong was said to be in talks for a $1.2bn acquisition by Amazon less than two years ago, but how times have changed for the e-commerce sector since then. The company, part of Rocket Internet's Global Fashion Group stable, is set to be acquired by Flipkart for only $70m in a bid to stem GFG's losses. It goes some way to explaining the 67% drop in GFG's valuation over the past year however.

At first glance, the 'oversubscribed' $330m funding influx secured last week by Global Fashion Group, part of the Rocket Internet group of companies, looks impressive. However, the valuation at which GFG raised the cash is a third of that at which it raised money a year ago, and, in this week's Big Deal, GCV examine how Rocket Internet's businesses are collectively fundraising in a tough e-commerce environment.

Chinese internet, media and electronics group LeEco has grown at an astounding rate over the past two years through some large-sized investments, and now it is looking to expand into the US through the $2bn acquisition of consumer electronics producer Vizio. Founded in 2002, Vizio competed against some of the world's largest TV manufacturers and won by assembling its low-priced products in Asia with the help of strategic partners and shareholders AmTran and Foxconn. The former set to make some $400m from the deal.

Unilever is set to exit social marketing platform Olapic in a $130m acquisition by Monotype. Olapic had raised $21m in VC funding, including $15m in a Unilever Ventures-led series B round last year. E-commerce brands Bonobos and Warby Parker, both of which took part in Olapic's $1m seed round, also look to have a healthy exit coming from the deal.

Platfora gets up for Workday acquisition

Big data technology producer Platfora had raised $95m since 2011 from backers including Cisco, Citi and HSBC, and has been acquired for an undisclosed sum. 

MyTaxi gets a friendly Hailo in merger deal

Daimler-owned MyTaxi is joining forces with KDDI-backed Hailo to form what they hope will be Europe's market leader in app-based taxi ordering.

Government Department:

Talend recruits $94.5m for IPO

The BPIfrance-backed cloud computing company has raised more than $94m in an initial public offering on Nasdaq, floating above its range.

INVESTMENTS

It has been an active first six months for Intel Capital. Brooks said between January and end-June, Intel Capital invested $308m in 19 new deals and “nearly three dozen [35] follow-on financings” focused on the cloud, the internet of things and other areas of innovation.

The first half of 2016 also saw at least nine M&A exits, with purchases of Joyent (acquired by Samsung), Nexmo (Vonage), Rocketick (Cadence) and iControl Networks (Comcast), among others. In addition, China Digital Video went public in late June, with Impinj floating a few weeks later in late July.

Mitsui already holds stakes in numerous Asian healthcare companies, and now it has invested $101m in Columbia Asia, the Asian branch of US-based care provider Columbia Pacific Management, in a deal that will give it two board seats. Columbia Asia raised the cash as it prepares to expand into Africa, with its first clinic on the continent set to open next month. 

UBtech interacts with investors for $100m

UBtech, backed by Anhui USTC iFlytek, has added $100m to its coffers to boost R&D efforts for its family-friendly robots. 

Hero Sports, the eSports company spun out by Chinese game publisher Hero Entertainment in May, has raised $96m in a round led by outdoor advertising group Focus Media, which invested $45m. The platform has 50 million daily active users and some 400 million registered users, and recently signed an agreement that will see it incorporate US-based company Virtuix's VR technology into its gaming centres. 

Upthere launched its personal cloud storage service yesterday, at the same time revealing it has raised $77m in a round led by strategic investor Western Digital and venture firm KPCB. Alphabet and NTT Docomo also contributed capital, and the $77m represents the first funding Upthere has disclosed since it was founded in 2012.

Mobile gaming company Scopely has taken its total funding to just short of $100m in a $55m series B round that included game developer and publisher Take-Two Interactive. For Take-Two, the Scopely investment has a lot to live up to - its last VC investment was in Twitch, the game livestreaming platform that was acquired by Amazon for $970m in 2014.

EverFi, the operator of a critical skills and compliance learning platform with more than 14 million users certified, has raised $40m in capital from investors including Advanced Publications. The round took EverFi's overall funding past the $60m mark and comes in the wake of its acquisition of compliance learning specialist LawRoom last week.

Wonder Workshop, an Alphabet-backed developer of educational robots that can help teach kids about coding and fundamental computer skills, has secured $20m in a series B round that will enable it to enter Asia. Idea Bulb Ventures, the US arm of Chinese venture firm Innovation Works, co-led the round and will be able to offer a link to its parent that will assist the startup in that quest.

Government Department:

Byju's to educate itself with $50m

International Finance Corporation is exploring a commitment of up to $15m in a $50m funding round currently being raised by edtech company Byju's.

University Corner:

Big deal: Universities keep breaking records

Institutions including Purdue, Florida and Pittsburgh have ended the academic year with technology transfer offices breaking their own spinout records.