Corporate Venture Capital investments declined in 2022. There was a QoQ decline in deal value through Q3 while deal volume registered growth and reached an all-time high in Q1 but suffered setback in the subsequent quarters.
2021 was an exceptional year for CVC funding activity; the deal volume crossed 2,000 while the corresponding deal value also surpassed $100 billion mark for the first time. According to GlobalData’s Financial Deals Database, a total of 2,085 CVC backed funding deals worth $103.1 billion were announced during 2021, a 33.1% volume growth and a 111.5% jump in value over the previous year.
CVC backed funding deals volume and value declined by 15.9% and 25.8% respectively in Q3 2022 compared to the previous quarter. However, the quarter saw active participation from several CVC firms. Coinbase Ventures led the pack by volume as well as value with 23 deals worth $916.8 million in Q3 2022.
GV Management Co LLC and Cowen Healthcare Investments occupied the second and third position by value with deals worth $891.9 million and $841.7 million in Q3 2022, respectively. Meanwhile, CICC Capital Management Company Limited and Intel Capital Corp occupied the second and third position by volume with 15 and 12 deals, respectively.
The US continues to attract majority of CVC funding and remain much ahead of peer countries. The US saw announcement of 177 deals worth $7.4 billion in Q3 2022 and was distantly followed by China with 33 deals worth $1.7 billion and Israel with 16 deals with $519.5 million.
Telecom & technology remained the most active sector for CVC investments accounting for more than 50% and 40% share of deals volume and value in Q3 2022, respectively. The sector saw announcement of 234 deals worth $5.9 billion during the quarter. However, it was decline of 25.7% and 45.1% over the previous quarter. Akin to telecom & technology, several other sectors also suffered setback.
Meanwhile, sectors such as automotive, medical equipment and agriculture were among the sectors that gained significant CVC investors’ traction during Q3 2022 registering double and triple-digit Q-o-Q growth.
Although technology still continues to be the preferred space for CVC investments, some firms are also seen making strategic investment in areas such as pharmaceuticals, digital health and renewable energy space. We are observing a shift in investment strategy; themes such as cloud, cybersecurity and edtech gained significant traction in 2020 and 2021 amid lockdowns and adoption of remote work, however themes such as ESG, batteries, carbon emission, renewable energy and batteries are currently gaining prominence.
For instance, GV Management Co LLC made investments in pharmaceutical companies, Areteia Therapeutics Inc, Pretzel Therapeutics Inc and Vicinitas Therapeutics Inc in Q3 2022; Intel Capital Corp invested in digital health company, Biofourmis Pte Ltd; M12 made investments in digital health company, Intelligent Lab on Fiber; CICC Capital Management Company Limited invested in Gaojing Solar Technology Co Ltd, which is active in solar energy space; and Dongfeng Asset Management Co Ltd invested in Hubei RT Hi-Tech Advanced Materials Co Ltd, a lithium battery cathode material manufacturer. Interestingly, some of these are also big-ticket investments.
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