The venture capital boom of 2021 wasn't built from traditional VC money. New methods of disbursing angel and seed capital were some of the new methods of capital that played a role in the global trend. Corporate venture investors were busy, investing gobs of parent-company cash into far-smaller concerns.
Wealthy businesses use corporate venture capital to build their own investing arm. M&A, early access to technology, partnerships and financial goals are usually combined in these efforts. It is rare to find a corporate venture concern that does not have one or the other. Their investing is an interesting blend of traditional venture and corporate opportunism.
Money, markets and startups are explored by the Exchange.
You can get The Exchange newsletter every Saturday.
CVCs were busy last year. New data from CB Insights shows that the year of 2021 was an all-time record for CVCs, and a near-record year by others.
The technology world took note of the fact that MongoDB put together its own fund, an event that the technology world took notice of. Corporate investor work is used by public companies before they reach mega-cap status. Private companies have launched their own CVCs at a time when the amount of capital available to pre-IPO companies is at an all time high.
Today, we’re exploring the data behind 2021’s CVC investing boom with commentary from Serge Tanjga, SVP Finance at MongoDB. Tomorrow, we’ll dive into the hows and whys of CVC in the current venture climate with commentary from a number of corporate investing players — and even one public company that is choosing to not build its own investing arm. Sounds good? Let’s get into the data.
The pace at which new CVC concerns are set up and the rate at which the larger CVC segment invests are two ways to track the growth of corporate venture capital.
We will take them in order. More CVCs are being compiled in the current market than ever before. CB Insights data shows a huge increase in the number of CVCs created in 2020. The result in 2021 was lower than in the year before. The second-hottest year for new CVCs reaching the market was in 2021.
Tanjga said that more mature tech companies set up CVC arms because they have excess capital to deploy or because they are in the VC space.
We can't tease out a perfect split of CVC focus from the pace at which new funds were put to market last year. It is safe to assume that a good number of returns-first and strategy-first CVCs were launched in the new crop of corporate venture players. The corporate portion of the market is deeper than ever, and that means that their set of capital funding options is not only broader than ever, but also that.
Why do we care?
All Rights Reserved © 2024
