Since the beginning of 2018, a fifth of all corporate investors whose deals we track appear to be newcomers.
Most of the corporate investors taking minority stakes in the second quarter were investors that have done at least one deal before (75%). It is, thus, noteworthy that one out of every four (25%) corporates was disclosing their first minority stake deal in the past quarter. And the proportion of these “first-timers” appears to have stayed around 20% in all quarters since the beginning of 2018, as the GCV Analytics chart below illustrates.
In previous years, like in 2017, the proportion of first-time corporate investors was consistently lower than 20%, as our data show. There is a caveat, which must be borne in mind, however. It is hard to estimate how many are actual newcomers to the corporate venturing game, as some of them may have done other occasional minority stake deals in emerging enterprises but not announced them publicly.
What are the implication of this? Corporate venturing – understood in its broadest sense as minority stake investing in emerging companies – appears to have become an innovation tool to be employed by ever more corporations around the globe, rather than by a few global leaders. While it may be that some of these newcomers are occasional investors in startups or, conversely, more frequent than the data suggest, this is very unlikely to be accidental in a time when valuations have reached peaks unseen since the dot-com bubble and when incumbents are increasingly fearful of disruption.