Corporate Venture Activity Rebounds After Slump in Deals and Dollars

Corporate venture capital investments started strong and stayed high during the second quarter, with $2.1 billion invested in innovative startups throughout the United States during the three months that ended in June, according to a survey released today.

That’s a 16 percent gain over the $1.8 billion that corporate VCs invested during the same quarter last year, and a 93 percent leap from the first quarter of this year, when corporate venture arms invested almost $1.1 billion, according to CB Insights, a New York financial data firm that tracks venture deals.

The firm said corporate VCs participated in 118 deals, which was 9 percent fewer than the 130 deals counted during the same quarter last year—but 40 percent more than the 84 deals counted during the first quarter. The data from CB Insights showed a huge spike in funding for cleantech ventures. Funding for Internet and mobile/telecom deals also scored high. In terms of investment stage, corporate VCs participated in more seed-stage rounds than usual. Online results of the survey are available here.

Overall, corporate venture arms participated in almost 15 percent of all venture deals during the second quarter, and accounted for $2.1 billion—or almost 26 percent—of the $8.1 billion in total VC investment activity during the quarter.

Second-quarter deals involving corporate VCs were substantially bigger—$17.8 million, on average—than conventional VC deals, which have remained flat at $10 million over the last 5 quarters. Other highlights from the survey:

—California continued to be the top destination site for corporate venture capital, accounting for 58 percent of all corporate venture deals nationwide and 75 percent of the capital invested. Corporate VCs sank just

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.