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04

Feb

2013

Corporate VC is Here to Stay PDF Print E-mail

John Taylor

Written by John Taylor   
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While statistically, 2012 wasn't a very dramatic investment year for U.S. venture capital (with a slight decline overall from 2011, but higher levels than 2010), corporate venture capital (CVC) continued to quietly gain strength. In 2012, CVC reached a 4-year high in participation (percent of deals with at least one corporate VC) of 15.2%, rising more than a percentage point from 14.1% in 2011. And dollar share also rose to 8.2% of total VC dollars in 2012, up from 7.5% last year.

Historically, it has been during difficult economic times that corporate venture programs have waned. So, it is significant that the CVC investment numbers have held steady as we have moved through the recession. This stability, coupled with more and more corporates joining the NVCA each year (it is our fastest growing new member segment), suggests that the sector is poised to become an even more important part of the VC landscape in the next five years.

Compared with total VC, corporate VCs are playing their largest roles in industrial/energy deals (21% of all deals have CVC in them), biotechnology (20%), computers (19%) and networking/equipment (18%). And within the CVC investment pool itself most dollars are being directed to companies operating in software (27% of all 2012 CVC dollars); biotechnology (21%) industrial/energy and IT Services (11% each).

Among the four stage categories (seed, early, expansion, and late), corporate groups far and away were most active in expansion stage deals measured by both total dollars invested (almost 10 % of all expansion stage dollars), deals completed (18% of all expansion deals) and 42% of all CVC investment.

For more information on corporate venture capital investment, check out our 2012 YE data here.

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