Global Corporate Venturing (GCV) recently released their analysis, “CVC in 2021: The Trends, Part One,” examining 2021's corporate venturing trends, including growth in funding, IPOs and SPAC mergers, M&A and the emergence of corporate venture capital groups, or CVC, in new sectors.  According to their report, venture capital funding continued to flow, exits increased, and there was an intensification of the digitization process. Below are highlights from the report.

Funding

While 2020 was a record setting year for overall VC funding as well as CVC-backed deals, 2021 well exceeded the previous year. Global Corporate Venturing tracked $283bn raised in corporate backed rounds through December 2021, more than double the $131bn raised through similar rounds in 2020.

They point out that some of the largest individual rounds took place in the transportation sector, citing electric truck developer Rivian’s $5.15B investment (before its $12B IPO in Q4), autonomous driving technology developer Cruise, which completed a $2.75B round in April, as well as SpaceX, which raised $850M in February.

IPOs

According to data from Pitchbook, there were 1,028 IPOs in 2020 vs. 1,126 in the just the first half of 2021.  In total, 2021 saw just over 2,000 public exits.

Rivian’s $11.9B IPO was highlighted as the largest for a VC-backed tech company since Alibaba in 2014 and the biggest for a US-based tech company since Facebook in 2012.  There was also a great deal of Asian companies debuting on the US market, including the China-based video streaming platform Kuaishou, South Korea- based e-commerce marketplace Coupang, and China-based ride hailing service Didi. 

SPAC mergers

We all saw the incredible number of SPACS in 2021. GCV reported that SPAC mergers jumped from 66 in 2020 to 204 in 2021, with cash allocated through accompanying private placements soaring from $17.2B to $60.5B. There was especially active period of flotations for SPACs beginning in the second half of 2020, carrying into 2021 that drove this increase.  However, GCV predicts that the fall in IPOs for the vehicles will continue into 2022.

The largest deals noted were Grab, the Southeast Asian mobility and financial services provider with $8.3B in pre-IPO funding; Lucid, the electric vehicle developer, with a $24B valuation; self-driving software developer Aurora, valued at $13B; and online financial services provider SoFi, with an $8.65B valuation.

Mergers & Acquisitions

2021 was also a very busy time for the M&A market for pre-IPO companies, with the largest deal being the merger of on-demand ride provider Gojek and online marketplace Tokopedia. These two Southeast Asian tech giants combined to form GoTo with an $18B valuation.

Other deals of note were DoorDash’s acquisition of consumer goods delivery service Wolt valued at $8.1B, as well as medical data exchange Datavant’s merger with healthcare data software producer Ciox Health at a $7B valuation. 

GCV does point out that M&A might be a more appealing exit route in 2022, as pre-IPO valuations for financial and health technology providers rose in 2021 but share prices for publicly-listed companies in those sectors were more volatile.

New CVCs

According to GCV, many of the most active new CVCs were from digital first industries.  This indicates that CVCs are evolving from their traditional image. This is most evident in the crypto space – with players such as Coinbase and Binance, blockchain app publishers Animoca Brands and Dapper Labs, and trading firms Alameda Research and CMT emerging as some of the biggest backers of the year’s crypto startup boom.

As we kick off a new year, we believe corporates will continue to look to corporate venturing programs as a way to both mitigate the risk of disruption but also for financial and strategic gain.