The Corporate Venture Machine – Saudi-backed golf circuit – World's biggest camping app – Functional recovery beverages – Consumer genetics – Precision psychiatry medicines
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The corporate world and investing have always been interlinked. Mergers, acquisitions, market flotations, and a bunch of other corporate finance shenanigans play a critical role in driving company valuations and shareholder returns. But the line between corporations and investing is becoming increasingly blurred in the era of Corporate Venture.
What’s in a name? Depending on where you hang out, you’ll hear it called Corporate Venture, Corporate Venture Capital, or the slightly zany but undeniably dynamic Corporate Venturing. They all mean the same thing; businesses investing in other businesses.
The motive of such moves is clear – to manage innovation. By investing in disruptive startups, large corporations can uncap huge upside opportunity and floor huge downside risk. They can import innovation quickly and cheaply (or at least, cost-effectively), benefiting from technological advancement without disrupting legacy operations. And they can neutralise potential challengers by aligning interests and “going on a journey” with them.
When I started this newsletter, I knew that Corporate Venture was big, but I had no idea just how big. Every week, reams of corporations are pumping capital into startups in sports, health, and entertainment. Although total deal flow growth was flat last year due to COVID, so-called mega-rounds (those worth $100M+) with Corporate Venture participation reached an all-time high of 182 in 2020 – a 48% increase compared to the previous year. It feels like an arms race, one fuelled by supportive macroeconomics (low rates, post-COVID recovery, rising inflation), cultural narratives (the cult of the founder and their mythical steed, the tech unicorn), and the indefatigable sense of optimism (and FOMO) that pervades captains of industry.
When I was working in investment banking back in the late 00s and early 10s, the elephant everyone was looking to bag was the Sovereign Wealth Fund. Now it’s Corporate Venture. Names like Nike, ASICs, BAT, and Telefonica sit cheek by jowl alongside the Andreessen Horowitzs, Sequoias and Index Ventures of this world in massive fundraisings that are re-defining the parameters of Series A, B, C. You can almost hear the Valley tech journos whispering... “$25 million Series As are SO last year, darling.”
The corporate venture industry has come a long way since 1914, when Pierre S. du Pont, head honcho of chemical and plastics manufacturer DuPont, invested in a small private business by the name of General Motors. His motive was both strategic and financial, and this approach remains the modus operandi, over a century later. Corporate Venture firms are looking to do more than generate financial returns – they’re looking to build long-term value through synergistic investments that capture new markets, insulate vulnerable business units, and forge new commercial models.
This means investment mandates can be pretty flexible and diversified. So you end up with unusual outcomes like petrochemical giants investing in blockchain startups. Do doubt there’s method in the madness, somewhere. Corporate Venture is no longer some C-suite exec making a gut call on the next Facebook – it’s an industry in its own right, with established corporate structures, industry associations, thought leaders, and headhunters. Some make direct investments internally. Some are LPs of venture capital funds. But all of them are becoming institutionally robust.
I’m interested in how Corporate Venture fares during the next phase of the credit cycle. Right now, things are at fever pitch, with the technology industry inflating rapidly and corporations desperate not to miss out. But at some point, greed will give way to fear and market dynamics will shift. This is precisely what happened at the start of this century, when the Dot Com bubble burst and corporations abandoned Corporate Venture like a deflated paddling pool. Then, after a painfully slow recovery, corporate investment once again crashed in 2008.
The Corporate Venture Machine is clearly a pro-cyclical phenomenon. But investing in innovation is counter-cynical. Innovation is not an asset class like commodities, or stocks, or fixed-income – it’s a fundamental driver of value that can protect businesses from the vagaries of the economic cycle. We know that out of the ashes of financial collapse, new ideas and companies are birthed. I wrote about this recently. Look around for examples of Creative Destruction and you will see that many of the high profile companies driving the current boom in Corporate Venture rose from the ashes of the Dot Com Crash and the Global Financial Crisis (FAANG being the most obvious example, although that should probably now be MAANG). Behold the Eternal Return of markets, played out in press releases and Techcrunch articles for the rest of time. Markets are stuck on a loop. Corporate Venture will face a new reckoning, a new ascent, a new past.
Investing in new ideas and business models can never be a bad thing – can it? There is an argument that companies taking minority stakes in other companies exposes them to lots of risk without the ability to effectively manage that risk. Most corporations are not geared up to be allocators of capital, and investing in startups is notoriously difficult and risky. Perhaps they’d be better off keeping their powder dry and acquiring companies so they can pay the piper and call the tune?
I can see both sides of the argument, but the reality is that the horse has already bolted. Corporate Venture is here to stay (with some inevitable ups and downs) so it makes sense for angel investors to explore ways of working with this tectonic force in private markets. I haven’t explored this angle in much depth with Skin In The Game. Some of my most engaged readers work for big companies (Premier League football clubs, S&P 500 companies, global media agencies), so the deal flow and thoughts I’m putting together every week must be resonating on a personal level. Skin is aimed at angel investors, but it would be cool to co-invest alongside corporations and perhaps even explore sourcing investment opportunities for the big beasts of venture capital. Feels like a win-win.
⛓ Tech Company Powering Top NFTs Hits $3.5B Valuation – Alchemy, which creates technology to help developers build applications on Ethereum and other blockchains, raised $250 million in a Series C round led by Andreessen Horowitz. The San Francisco-based company is now valued at $3.5 billion. Lightspeed Venture Partners and Redpoint joined the round, as did existing investors Coatue, Addition, DFJ, and Pantera.
🇸🇦 Saudi-Backed Golf Circuit Announces $200 Million Investment In Sport – Professional golf has a new deep-pocketed upstart circuit, backed by Saudi Arabia’s sovereign wealth fund and led by former world No. 1 Greg Norman. LIV Golf Investments plans to invest more than $200 million into the sport, including prize funds and player commitments, starting with a partnership with the Asian Tour that will create 10 new annual events.
🇦🇺 A-Leagues set for $130 million payday with equity sale to US firm – The A-Leagues are set to receive a game-changing payday by selling a stake of the competition to an American private equity firm for $130 million, in what will be the biggest single injection of cash into Australian club football.
⚽️ 'Czech Sphinx' Kretinsky close to buying big stake in West Ham United – A Czech-based billionaire who owns big stakes in Royal Mail and J Sainsbury is within days of agreeing the purchase of a big stake in West Ham United Football Club that could lead to a full takeover. Daniel Kretinsky, who owns the Czech top-flight side Sparta Prague, is in advanced talks to acquire a 27% stake in the Premier League club.
👟 Allbirds targets a more than $2 billion valuation in upcoming IPO – Allbirds is targeting a valuation of as much as $2.2 billion in its initial public offering, the company said in a regulatory filing. The sustainable shoe brand said it is offering 19.2 million shares priced between $12 and $14. At the high end of that range, Allbirds would bring in roughly $269 million in its market debut.
🧠 Mindfulness App Open Raises $9M in Series A – The LA-based mindfulness studio’s round was led by existing investor Founders Fund and A.Capital Ventures with participation from Susa Ventures, Aglaé Ventures, backed by Groupe Arnault, as well as a roster of prominent CEOs in consumer technology such as Twitter and DoorDash, among others.
🏕 $11M Invested in Camping App The Dyrt to Nearly Double Team Size – The Dyrt, the No. 1 camping app with the most active camping community in the world, recently closed an over-subscribed Series B round of funding led by Realization Capital Partners. The investment, combined with strong revenue from The Dyrt PRO, has the company adding 30 new roles to its current remote team of 40.
👴 Aging Wellness Pioneer Modern Age Raises $27M In Funding – $27 million in Series A funding led by Oak HC/FT, alongside GV and founding partner Juxtapose. The funding brings Modern Age’s total capital raised to $33 million.
🍽 Dig, a vegetable-centric, multi-format restaurant group, has raised series F funding of $65 million – The round was supported by new and existing investors including EHI, the fund affiliated with Danny Meyer's Union Square Hospitality Group, Monogram Capital Partners, and Avalt, as well as new investors Kitchen Fund, Eminence Capital, LP and Inherent Group.
🧃 GRAMMY-Nominated Rapper Jack Harlow Invests In The Plug Drink's $1.5 Million Seed Round To Expand Leading Plant-Based Recovery Beverage Business – The Plug Drink, a leading functional recovery beverage company using Asian-inspired plant-based formula, closed a successful $1.5 Million Seed funding round. GRAMMY-nominated rapper Jack Harlow has participated in the financing round, joining other new investors, including venture funds Backend Capital (Lucy Guo) and Kaieteur Capital (Nicholas Parasram), and Kevin Gould (Founder of Kombo Ventures & Co-Founder of Glamnetics), Phil Quist (Agent at CAA & Investor at Connect Ventures), Adriana Arce (VP of REBEL & Former Manager of Miley Cyrus), and Kevin Lee (Co-Founder of immi).
🥤 BAT Joins Tobacco’s Health Push With Energy-Drink Investment – British American Tobacco Plc invested in startup Tru, a maker of energy and wellness drinks, as the owner of Lucky Strike cigarettes joins a health push amid efforts to move away from tobacco and nicotine. BAT’s corporate-venture unit Btomorrow Ventures led a funding round of about $3.5 million in Massachusetts-based Tru.
👩⚖️ Everly Health Accelerates Position as Leading Digital Health Company with Acquisition of Women's Health Brand Natalist – Everly Health, the digital health company at the forefront of the virtual diagnostics-driven care industry, acquired Natalist, a women’s health company that offers consumers conception and pregnancy essentials that are thoughtfully designed for ease of use and are 100% plastic neutral.
🩸 23andMe Agrees to Acquire Lemonaid Health – 23andMe Holding Co, a leading consumer genetics and research company, signed a definitive merger agreement with Lemonaid Health, an on-demand platform for accessing medical care and pharmacy services online. Under the merger agreement, the purchase price is $400 million, of which 25% will be paid in cash and 75% in shares of 23andMe Class A Common Stock.
🧠 Alto Neuroscience Emerges with Largest Clinical-Stage Precision Psychiatry Pipeline and $40 Million in Financing – lto Neuroscience emerged from stealth with $40 million in funding to advance the largest clinical-stage pipeline of precision psychiatry medicines.
🧫 Cambrian secures $100M series C for Roivant-like approach to biotech creation with goal to slow down human aging – Cambrian Biopharma is on a mission to slow down the aging process and treat humans before they even develop cancer or Alzheimer’s disease. Before the biotech can test its compounds in prevention-focused trials, though, it has to prove its chops in acute diseases and the company now has a $100 million boost for such work.
🎧 Psychedelic Music Studio Closes $4.5M Seed Round: The Birth Of Psychedelics Ancillary? – As the psychedelic medicine sector progresses, institutional investors are finding opportunities in companies that provide products and services surrounding the sector’s core operations.
🇨🇦 Canadian entrepreneur gifts $5 million to help create psychedelic research centre for mental health – Sanjay Singhal is 56 and on a mission to transform mental health care. He is the philanthropist behind Canada’s first psychedelic psychotherapy research centre for mental health at Toronto’s University Health Network (UHN). Starting with a $5 million donation made through the Nikean Foundation that he founded, Singhal hopes researchers at the centre can unlock the potential of psychedelic medicine and find answers on how psilocybin and a so-called “God molecule” can help transform mental health care.
🕶 Meta’s Acquiring a VR Fitness App Maker Called Within – Less than a day after rebranding to Meta, the company formerly known as Facebook is acquiring Within, a startup focused on fitness-related VR apps.
👩💻 More women are taking ownership stakes in sports teams – Though women have held a place in the ownership ranks of American pro teams for years, female-led control bids have been exceedingly rare, if not altogether nonexistent, throughout the country’s top leagues. Yet there are now clear signs of change and two key factors – namely, loosening ownership restrictions and increasing diversity among the mega-wealthy – may accelerate what already appears to be a budding trend.
🧫 Juventas Cell Therapy closes a $63M funding round as it eyes a big push for blood cancer hopeful – Juventas has grabbed a $63 million series C to advance its CASI Pharmaceuticals-partnered drug CNCT19. The money will be used toward an NDA for the cell therapy as it eyes a future sales plan for the drug.
🩸 London-based biotech Leucid Bio raises £11.5M funding for hard-to-treat cancers – Based out of London, Leucid Bio is a pioneering biotech company working on next-generation cell therapies for hard-to-treat cancers. Recently, the company secured £11.5 million in a Series A funding round. The investment was led by Epidarex and new investor Vulpes Investment Management. Also, other new investors 2Invest and Future Fund of the British Business Bank and current investor Sofinnova Partners participated in the round.
🗺 Immunai secures $215M for immune system map, fuel more acquisitions – Immunai wants to digitally map the immune system, and it's amplified those efforts in recent months with two acquisitions and multiple funding rounds. The latest is a $215 million series B that will fund new partnerships, more acquisitions and a doubling of the team.
🇺🇸 Sphere Fluidics closes a $40 million funding round – Sphere Fluidics, a company that has developed and is commercialising single cell analysis systems underpinned by its proprietary picodroplet technology, closed a $40 million (circa £30 million) investment round. The round was led by Sofinnova Partners and Redmile Group co-investing on equal terms.
🇩🇪 German biotech startup Exciva secures €9M to address ‘Agitation/Aggression’ in Alzheimer’s disease – Germany-based Exciva, a clinical-stage biotech company developing a novel therapeutic compound for treating agitation and aggression in Alzheimer’s disease, raised €9M in its Series A round of funding. The round was led by Andera Partners. LBBW Venture Capital and Cure8 also participated in the round.
💰 Mozart Therapeutics lands $55M to develop therapies for celiac and other diseases – The Series A funding round was led by ARCH Venture Partners along with Sofinnova Partners. Other backers include MRL Ventures Fund from Merck, Leaps by Bayer, and Eli Lilly & Company.
⛅️ Medable Secures $304 Million in Funding at $2.1 Billion Valuation – Medable, the leading cloud platform for patient-centered clinical research, raised $304 million in Series D funding to accelerate global adoption of digital and decentralized clinical trials, enabling ubiquitous access to the latest treatments for every body and every biology. The round was co-led by new investors Blackstone Growth and Tiger Global and existing investor GSR Ventures. The round also includes follow-on investment from existing investors Sapphire Ventures and WTI.
⚡️ Magnus Medical debuts with $25M to target drug-resistant depression with personalized therapy – The neurostimulation startup Magnus Medical is raising the curtain with $25 million in hand and an FDA breakthrough designation for its personalized treatment for severe cases of depression. Built on technology originally developed at Stanford University, Magnus exited stealth with the early funding round and also reported data from a controlled trial of its noninvasive system, which pairs transcranial magnetic stimulation with digital imaging scans. The goal is to deliver stronger, targeted bursts of energy to specific areas of the brain on a patient-by-patient basis, to help reset the neural pathways that can drive the symptoms of depression.
🧬 Peninsula biotech toolmaker lands $165M to rewrite how DNA gets made – The South San Francisco company is looking to hire about 100 people as it ramps up to full commercialization of its benchtop synthetic DNA printer.
🥛 TurtleTree Raises $30 Million In Series A To Expedite Full Commercialization Of Cell-Based Milk – Leveraging its proprietary cellular technology, TurtleTree is currently able to create highly functional components naturally found in milk, including lactoferrin, human oligosaccharides (HMOs), and alpha-lactalbumin, all of which have been deemed natural according to the latest ISO standards in Asia.
💵 Cedilla tops off series B with additional $25M to test drugs in mesothelioma, certain breast cancers – Cedilla Therapeutics, an oncology biotech founded by a former Editas executive, has snagged an additional $25 million to bring two small-molecule oncology programs into human trials. The financing from RA Capital, Janus Henderson and other VC shops adds to the $57.6 million already raised in series B funds a year ago.
🏍 RealEats secures over $16 Million in Series A Funding – The round was led by Hamilton Lane on behalf of the New York State Common Retirement Fund, which participated through its co-investment fund managed by the firm, and also includes global health and wellness brand GNC, Armory Square Ventures, and Excell Partners.
🌱 Biotech startup Shiru sprouting plant-based ingredients with new capital infusion – the Emeryville-based company closed a $17 million Series A round, led by S2G Ventures. Joining S2G on the round are returning investors Lux Capital, CPT Capital, Y Combinator and Emles Venture Partners, and new investors, The W Fund, SALT and Veronorte. The new funding brings Shiru’s total funding to date to just over $20 million.
First Pakistan, then New Zealand. What’s happened to India at this World Cup? They keep losing the toss, and losing matches. And now close to a billion cricket fans are reliant upon mathematics to keep them in the tournament. After what India did to England this summer, I can’t help but feeling slightly happy about that.
Founder / Skin In The Game
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Skin In The Game is a startup investment club connecting investors with visionary sports startups. We provide a regulated platform for fans, athletes, entrepreneurs and brands to collaborate and co-invest. By investing in SportsTech we can unleash the full potential of sports, enriching the lives of people everywhere.
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