Image Credit: Maksym Poriechkin
Corporate venture capital (CVC) is an investment by a corporate (fund) into external startups in order to make a financial return or to gain a competitive advantage. CVC is a polarizing subject and opinions are divided. Fred Wilson from Union Square Ventures believes that it’s evil and corporates should not invest in startups but simply buy them. While Marc Andreessen from Andreessen Horowitz on the other hand is co-investing with corporations such as General Electric. Whatever the opinions are, fact is that CVC is on the rise, also in the old continent.
In order to get a good overview of the scene, Sirris.be, the non-profit I work for that maps European technology scaleups, recently looked at all of the European tech companies that have raised at least $1 million in 2016 from corporates. The data (which you can view here) is comprised of $17 billion funding and more than 1,650 transactions from 31 countries. Additional input came from the Corporate Venturing Europe group.
How big is the CVC impact in Europe?
Corporates have been involved in at least 292 deals worth $4 billion in investments in 2016. The biggest investment was $398 million in Africa Internet Group by AXA and Orange.
While the European scaleup ecosystem is strongly oriented towards B2B, CVC investments are more balanced: 51 percent in B2B and 49 percent in B2C companies.
The majority of CVC are balance sheet investments, although there is a trend towards dedicated corporate venture capital funds. CVC funds are often exclusive to a single corporation, although there are also CVC funds that are co-investments of companies that have complementary activities, such as Aster Capital, which was…