Lightning striking for global venturing?

The week's review of venturing activity across our three titles, Global Corporate Venturing, Global University Venturing and Global Government Venturing, is taken from our weekly podcast - see below for details. 

Finally, after two weeks off, Thierry Heles, editor of GGV and GUV, has now returned from convalescence so will be back on the Daily Alert from Monday. As a taster of the news waiting to flow, since the start of last year, 811 European VCs have participated in at least one of the 2,680 venture deals completed across the continent, according to our data partner, PitchBook. 

However, more than half of its top 10 since the beginning of 2015 are state-run investors (name with their investment counts in brackets):

1. High-Tech Gründerfonds (76)
2. Bpifrance (67)
3. Finnvera (62)
4. Kima Ventures (55)
5. Almi Invest (49)

T-6. London Co-Investment Fund (44)

T-6. Funding London (44)

1. Index Ventures (36)
2. Scottish Enterprise (32)

T-10. SEED Capital Denmark (31)

T-10. LocalGlobe (31)

But even while the numbers of deals seem large, Europe is dwarfed by China’s state plans.

FUNDS

China has just reportedly approved the establishment of a state-owned $30bn VC fund in Shenzhen, according to the local Economic Observer,

The fund will launch with an initial $15bn to back technological innovation, according to the Observer’s report.

The new fund would make up less than 10% of China’s government venturing programme. China holds $336.4bn for investing in the nation’s startups at the end of 2015, according to data from Beijing-based VC Zero2IPO. Zero2IPO said this had tripled since 2013 and was made up of 780 government guidance funds, according to Bloomberg in its analysis of the Chinese report.

And it is a model others are copying. ONGC to drill into startups with $15m fund

Indian state-owned petroleum producer Oil and Natural Gas Corporation will invest in innovative seed-stage startups and also provide mentoring and resources. 

Funds are increasingly diverse in their stakeholders across the so-called triple helix of governments, universities and corporations.

Uber and Digi to experiment with Malaysian ideation lab

The corporates are collaborating with the Malaysian government's MaGIC initiative to help local startups learn about product, customers and marketing.

While in the UK, Cambridge Innovation Capital (CIC), a university venturing fund commercialises science and technology advances made at Cambridge University, has raised ￡75m ($90m).

New investors include Winton Ventures, the Oman Investment Fund and Woodford Investment Management. Cambridge University will remain the largest shareholder in CIC, owning about a third of the firm. The money tops up the original ￡50m investment from chip maker ARM and hedge fund Lansdowne Partners.

CIC has invested ￡33m in 13 technology startups in and around the Cambridge area. Victor Christou, CEO of CIC, said: “Since the inception of CIC and its initial fundraising in 2013, the company has made significant progress within the Cambridge cluster, one of the richest seams of scientific and technological innovation in the world. This additional capital will enable CIC to continue to support exciting [intellectual property] IP-rich companies and we look forward to continuing to work very closely with the University of Cambridge and our network within the Cambridge area.”

But not all firms survive. Global Corporate Venturing will reveal on Monday that  

Prudential Retirement, a business unit of New York-listed Prudential Financial, has closed its seed stage-focused corporate venturing group, Gibraltar Ventures, so the company can build a new innovation strategy around design, acquiring and partnering with startups. The extended story will be available then but as one of the Gibraltar team said: “It was amazing that Prudential decided to shut down the corporate venture group after only about a year. And we had accomplished so much in the short period.”

PEOPLE

For those who like a puzzle, when GCV broke the news back in May that Lisa Lambert and Marcos Battisti, vice-presidents at Intel Captal, had left one of them quickly started a new role. Lambert, who is chair of our Shift conference in NYC on October 28 in partnership with the NVCA, became managing partner with Sand Hill Road-based private venture capital firm Westly Group. Battisti, however, is currently trekking in Brazil but will next month join a VC firm focused on cyber-security… commendation for those who can guess!

In another move, Jerneja Loncar, who has been an entrepreneur-in-residence at car maker General Motors’ GM Entrepreneurs after nearly four years at GM Ventures until the start of 2014, has been planning her next step after successfully running one startup.

Jon Lauckner, chief technical officer at General Motors and president of GM Ventures, who will be attending the GCV-NVCA SHIFT: Accelerating Corporate and Venture Partnerships conference in New York City on 28 October, by email said: “It’s good to hear that Jerneja is doing well.”

On his ventures portfolio he said: “Yes, we’ve been able to put a fair amount of money to work and have some exits too. We have not (yet) replaced Jerneja in Europe because we prefer to focus on the opportunities in the US, Israel and China which are more promising than Europe at the moment.  

“Perhaps this is something that is specific to automotive-related technologies because we see most European suppliers and OEMs [original equipment manufacturers] in the Valley and Israel too. 

“In any event, you have to remain flexible because things change rapidly.  Just look at autonomous: Two years ago most people could barely spell the word. 

“Now, financial and corporate VCs are chasing any startup with the word ‘autonomous’ in their description. It reminds me a lot of cleantech about five years ago and SaaS companies three years ago. So, let’s see.” 

EXITS

General Motors reportedly made advances to portfolio company Lyft in the past few weeks to propose an acquisition, an offer Lyft turned down in order to raise more funding. No word on the size of the offer, but Lyft raised $1bn in January in a round that included a $500m investment by GM, and which valued it at $5.5bn.

Twitch has acquired Curse for an undisclosed amount, roughly a year after the gaming media and community platform received $30m in funding from Riot Games. Curse had raised at least $75m since it was founded in 2006, and reaches about 30 million people each month.

Japan-based Rakuten has acquired the assets of Bitnet, a US-based bitcoin wallet startup, for an undisclosed amount. Bitnet had raised in a $14.5m series A round in 2014 from Highland Capital Partners and Rakuten’s corporate venturing unit.

Tencent is reportedly set to exit contextualised services search app Vurb through a $110m stock and cash acquisition by Snapchat. Tencent invested in Vurb as part of a $2m seed round in 2013, and had assisted it in adding the chat feature which is said to have piqued Snapchat's interest.

INVESTMENTS

It's been a big week for internet group Tencent, with news emerging of three sizeable deals in which it's involved. The company has first of all led a $227m series C for game livestreaming platform Douyu TV - essentially a Chinese version of Twitch - as part of a deal that will involve Douyu's sports offering being absorbed into its own Qie Live platform. The deal came only five months after Tencent led Douyu's last round, a $100m series B round that also featured Zeus Interactive.

Tencent also co-led a $175m round for India-based Hike, which is developing an all-purpose messaging app not too dissimilar to Tencent's own WeChat platform, which connects to a huge range of e-commerce services in its home country of China. Foxconn co-led the series D round, which included existing Hike investors SoftBank and Bharti Enterprises, and which valued Hike at $1.4bn.

Tencent enters Keep in series C+ round

The China-based fitness app has followed a $32m Bertelsmann-backed round three months ago with more funding led by Tencent.

Film and TV studio STX Entertainment has received an undisclosed amount of funding from investors including Chinese corporates Tencent and PCCW at a reported valuation of $1.5bn. Founded in 2014, US-based STX has signed content distribution agreements with both, and aims to grow into a diversified media player with interests in music, digital media and VR, while producing around 12 films per year.

Jeffrey Li, managing partner at Tencent, who will be speaking at the Global Corporate Venturing & Innovation Summit in Sonoma, California on 24-26 January 2017, said: “It is interesting that China is chasing high quality content and the new media are paying very highly for quality. So talent is shifting from traditional to new media and adapting skills to learn. Tencent is looking at how to adapt new tech to media eg VR/AR and advanced tech eg AI, big data and natural learning.”

Turner led a $45m round for online media company Refinery29 last week that marks the latest in a series of moves to boost its digital offering. We take a closer look at the investment in this week's Big Deal and consider whether, in a world where traditional media giants are routinely investing in and partnering digital media platforms, there can really be such a thing as 'old media'.

This is a question GCV will also be asking as it prepares its sector report for the next, September, issue of the magazine so please do get in touch if you can share your insights.

Ford has been upping its corporate venturing activity of late, investing $182m in Pivotal Software at one end of the scale and in a $6.6m round for Civil Maps at the other, as it seeks to strengthen its software capabilities on the way to the planned launch of its first autonomous car in 2021. The carmaker has now teamed with internet company Baidu, which is developing its own driverless car, to invest $150m in LiDAR technology provider Velodyne. Velodyne's technology will be invaluable in enabling autonomous vehicles to navigate their surroundings and avoid collisions.

Chinese technology group LeEco continues to make a name for itself, diversifying into ever more areas, and now it's raised $50m from conglomerate Macrolink for its smart car unit. LeEco is developing the high-tech electric vehicle in partnership with Aston Martin and Faraday Future, and expects to release the first car through the initiative by the end of next year. GCV will be preparing a connected car report for October so please do get in touch if you can share your insights.

LeEco has also made its first fintech investment, providing $27m in series B capital for online finance platform Lancai. Lancai had previously raised cash from Legend Holdings and investment holding company Shanghai Zhonglu Group across two funding rounds.

Amazon launched its $100m Alexa Fund just over a year ago, and the unit has now made its largest investment yet, as part of a $35m round closed by smart thermostat developer Ecobee. Ecobee, which also counts corporates Carrier and Just Energy as backers, is competing in a crowded market but has just released its latest model, which is compatible with Amazon Alexa, meaning it can be controlled by a user's voice.

Corporate venturing units Novo Ventures, Roche Venture Fund and SR One have co-led an $86m series A round for Tioma Therapeutics, which is working on a cancer treatment that will target the CD47 immune checkpoint inhibitor, with venture firm RiverVest Venture Partners. Tioma, which was founded as Vasculox, will use the funding to advance its lead candidate through advanced proof-of-concept clinical trials.

Nutirinia, a developer of digestible insulin for infants, has raised $30m in a series D round featuring WuXi PharmaTech, taking its overall funding to more than $46m. The round will support pivotal trials in Europe and the US for two of the Maabarot Products-backed company's treatments, intended to combat intestinal malabsorption and short bowel syndrome.

US-based cybersecurity software provider ID Experts closed a $27.5m round featuring BlueCross BlueShield Venture Partners, the corporate venture capital arm of health insurance provider Blue Cross and Blue Shield Association. ID Experts provides identity protection software and services for the healthcare, insurance, financial services and higher education sectors, and claims to be the largest provider of identity protection products to the US government. John Banta, managing director of Blue Cross Blue Shield Venture Partners, by email said he was particularly interested in this area: "We're knee-deep in it.  Particularly next-gen threat detection and IAM [identity access management]."

Most of the world wants to be knee-deep in this field, too, it seems. In Latin America Tekpea connects to EPM for funding

Colombia-based utility service provider Empresas Públicas de Medellín has invested an undisclosed amount in the IoT company through its FCP Innovacion unit. Over in S?o Paulo, we’ll be helping the government for the next, Corporate Venture in Brasil conference on October 24-26 – so please let me know if you want to join the delegation, which already includes Yamaha, Diageo, Qualcomm, Microsoft, Ericsson, Philips, Telefonica, Samsung and Monsanto, and take a look at the Outline Agenda for the event.

The local people you could have the opportunity to meet with include: 

• Ambassador Roberto Jaguaribe, President - Apex-Brasil
• Peter Quadros, Head of Corporate Venture Capital - EMBRAER 
• Cristiano Lincoln Mattos, CEO - Tempest 
• Jo?o Antonio Lopes Filho, Partner - PortBank
• Everson Lopes, Managing Partner - The Hive Brasil 
• Flavio Pripas, Director - CUBO
• Fernando Borges, President - ABVCAP
• Robert Linton, Investor Relations - ABVCAP
• Jayme Queiroz, Investment Officer - Apex-Brasil
• Vinicius Scaramel, Managing Director - Brasil Ventures
• Daniel Grossi, Co-Founder & Director - Liga Ventures 
• Itálo Flammia, IT Director - Porto Seguro
• Bruno Varth Zaperllon, Technology & Innovation Director – Brazilian-German Chamber of Commerce
• Moises Swirki, Executive Partner - MSW Capital

The Global Venturing Review podcast, our weekly roundup of global venturing news, is available on iTunes, Stitcher, SoundCloud and through our podcast website. Note: Any reviews on iTunes or any other service are always useful. If you do listen and rate the podcast that would be much appreciated!

The text was first published on www.GlobalCorporateVenturing.com NOTE GUV and GGV on hols for the past week and will be again this week but GCV will continue to publish.