Back in 2010, corporates were by no means a go-to investor for European startups, accounting for just 10% of the funding they raised. Nowadays, the picture is quite different; so far, in 2024, corporates account for over a quarter of startup funding, in terms of volume of capital invested, according to data platform Dealroom — a huge uptick in interest.
So far this year, CVCs have also been involved in one in four European startup deals, according to Dealroom.
And that share is likely to only increase, finds a new report from advisory firm Mountside Ventures and VC firm Love Ventures published today and exclusively shared with Sifted. 89% of corporate investors plan to increase or at least maintain the number of startup investments they do in the next three years compared to the last three years.
The report surveyed 104 CVCs around the world, with a collective £20bn in assets under management. Over 60% invested via the balance sheet; less than a third have a separate fund vehicle. Respondents include Aviva, DMG Ventures, BMW i Ventures, FT Ventures, ING, Legal & General, Schenker Ventures, Societe Generale and Wayra.
Series A sweet spot
The report found that most corporate VCs like to invest between seed and Series B. 91% said they like to invest at Series A, while just 20% are keen to invest at pre-seed, and just 11% at Series D+.
The average minimum cheque size written by a CVC is £1m; the maximum average ticket size is £14m. Only 21% of respondents preferred to lead deals; 50% were indifferent.
Looking at sectors, B2B companies are the favourite destination for corporate capital, followed by AI and machine learning and fintech. B2C and healthtech startups are less in favour. 93% of respondents said they had a very specific sector focus.
Fewer had a very fixed geographical mandate; 57% said they focus on specific countries or regions.
96% of corporates surveyed said they make primary investments in startups; just 9% invest in startups via secondaries.
30% invest in VC funds, primarily to gain market intelligence. 77% of respondents said they prefer to back specialist, rather than generalist, investors.
Not about the capital
Overwhelmingly, respondents said their “value add” included access to internal business opportunities (80%) and access to enterprise customers (66%).
Just 13% of respondents thought that capital alone was ‘enough’ to offer startups.