The corporate venture pullback, in 5 charts

That’s according to the new research published this morning by Counterpart Ventures, Silicon Valley Bank (now a division of First Citizens), and PitchBook. The report, which surveyed more than 200 corporate venture teams, offers much-needed insight into how corporate investors (and the board rooms that fund them) are responding to the 2022 market crash.

Corporate venture is a sector I’ve been watching closely. After all, it was 20 years ago during the last major venture crash that we saw companies take a huge step back as they were forced to report billions of dollars of losses on startup investments. The venture losses didn’t go over well with public market investors and created a blemish on many a balance sheet.

Of course, that was 20 years ago. Corporations have since roared back into the market in full force, and CVCs participate in about a quarter of all funding rounds. Many companies have moved their venture arms off their balance sheet with allocated capital. While there are various reasons a company would want to do that (carry, independence, etc.), I’ll point out another: CVCs that operate more independently and don’t invest from their owner’s corporate balance sheet conveniently don’t have to disclose volatile investment performance in quarterly filings, and sometimes hardly any information about their venture arms at all. 

All of this makes it extraordinarily difficult for nosy journalists like me to get a real sense of how corporations are responding to this market crash versus the last. This report offers a few pointers on CVC sentiment. 

Patrick Eggen, who used to lead all the U.S. Investments at Qualcomm Ventures before cofounding early-stage VC firm Counterpart Ventures, described this year’s CVC activity as “sobering.” Private companies are resetting their valuations and corporate shareholders are upping their scrutiny—and we are seeing the lowest CVC participation in VC deals since 2015, Eggen said. CVCs seem to have adopted the sentiment of institutional VCs: They are pulling back how many deals they are doing, upping the scrutiny for new investments, and assigning challenging next steps for their existing portfolio companies. 

What’s more, Eggen tells me that CVCs will “pick a side going forward.” This means their path forward could entail a “more strategic” or financial mandate, he said. That may include dialing things back and going dormant for a while. Alternatively, some corporate venture teams (particularly those whose executive suites have more risk tolerance) may lean into this market cycle, Eggen said, getting “increased autonomy around decision making,” the ability to lead and price a majority of their deals, and go the route of traditional carried interest. 

Here’s some of the data below. You can download the full report here.

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: [email protected]
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Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

- SecureW2, an Amsterdam, Netherlands-based developer of passwordless security technology for companies, raised $80 million in new funding from Insight Partners. 

- Prove Identity, a New York City-based identity verification and authentication platform, raised $40 million in new funding from MassMutual Ventures and Capital One Ventures.

- Society Brands, a Canton, Ohio-based company designed to acquire and grow e-commerce brands, raised $25 million in additional funding from Gullane Capital, Callais Capital, and North Coast Ventures.

- Last Country, a media company founded by Tucker Carlson, raised $15 million in seed funding from 1789 Capital, according to the Wall Street Journal.

- Objective, Inc., a San Francisco-based AI-integrated search platform, raised $13 million in new funding. Matrix led the round and was joined by Two Sigma Ventures and others. 

- Cionic, a San Francisco-based developer of bionic clothing for those with mobility issues, raised $12 million in a Series A extension. L Catterton led the round and was joined by THVC and existing investors. 

- Finzly, a Charlotte, N.C.-based payment and banking platform for companies, raised $10 million in Series A funding from TZP Growth Equity. 

- Creature Comforts, a London, U.K.-based platform and clinic for subscription-based veterinary services, raised £7 million ($8.5 million) in seed funding. Torch Capital, Hanaco VC, and Boost Capital Partners led the round and were joined by others.

- Aindo, a Trieste, Italy-based producer of synthetic data for training AI models, raised €6 million ($6.3 million) in Series A funding. United Ventures led the round and was joined by Vertis SGR. 

- Skoon Energy, a Rotterdam, Netherlands-based platform for renting electricity and energy systems, like mobile batteries, raised $5.6M in Series A funding. Blue Bear Capital led the round and was joined by Graduate Entrepreneur Fund.

- Tia Lupita Foods, a Tiburon, Calif.-based manufacturer of hot sauce and other food products, raised $2.5 million in seed funding. Santatera Capital and GBM Ventures led the round and were joined by others.

- HealthCaters, a Berlin, Germany-based digital health screening provider, raised $1.2 million in seed funding. Barmenia Next Strategies led the round and was joined by Venpace, DvH Ventures, and angel investor Philipp Götting.

PRIVATE EQUITY

- KKR took Circor International, a Burlington, Mass.-based provider of products and services for the industrial and Aerospace & Defense markets, private for $56 per share. 

- A consortium led by Ardian acquired a greater stake (now 92%, in full) in Dedalus, a Florence, Italy-based provider of health care and diagnostic software. Financial terms were not disclosed. 

- Atlantic Street Capital acquired Brown’s Medical Imaging, an Omaha, Neb.-based medical imaging services provider. Financial terms were not disclosed.

- Home Care Pulse, backed by Cressey & Company, acquired Pre-Intent, an Austin, Texas-based recruitment platform for home-based and senior care providers. Financial terms were not disclosed. 

- LDR Growth Partners acquired ATI Corporation, a New Holland, Pa.-based manufacturer of skid steer and tractor loader attachments. Financial terms were not disclosed. 

- Lou-Tec, backed by Sagard, acquired Torcan Lift Equipment, a Toronto, Canada-based aerial lift rental company. Financial terms were not disclosed. 

- MOTIS Brands, a portfolio company of Prospect Hill Growth Partners, acquired Cargo Equipment Corporation, a Huntley, Ill.-based manufacturer of heavy-duty tie downs and cargo equipment. Financial terms were not disclosed. 

- Providence Equity Partners acquired a minority stake in Populous Holdings, a Kansas City, Mo.-based architecture and design firm for sports and entertainment venues. Financial terms were not disclosed. 

OTHER

- Sculptor Real Estate acquired a minority stake in the car wash platform of Wildcat Capital Management, a New York City-based family investment office. Financial terms were not disclosed.

FUNDS + FUNDS OF FUNDS

- Gridiron Capital, a New Canaan, Conn.-based investment firm, raised $2.1 billion in its fifth fund focused on branded consumer, B2B and B2C services, and niche industrial businesses. 

- Pfingsten Partners, a Chicago, Ill.-based private equity firm, raised $435 million in its sixth fund focused on entrepreneurial and family-owned manufacturing companies. 

PEOPLE

- Telegraph Hill Advisors, a San Francisco-based investment bank, hired Amit Mujumdar as a partner. Formerly, he was with Alantra. 

- Water Street Healthcare Partners, a Chicago, Ill.-based health care-centered investment firm, promoted Boris Bernstein as managing director of Europe. Formerly, he was with MIG Capital.