.png "The Rise of Corporate Venture Capital")
The Rise of Corporate Venture Capital
Big corporations see value in investing in startups. We track the increase in corporate venture capital (CVC) in emerging markets and what it means for startups and investing companies.
Request specific data sets, export tailored directories, and explore the full potential of our Platform. Reach out to our Sales Team
Investment activity in the Emerging Venture Markets has been increasing over the years. Over $7Bn was deployed in MEAPT-based ventures in 2022, almost on par with the funding that we saw in 2021. The funding activity comes at the hand of regional and international investors whose number almost doubled since the post-pandemic era. In 2021, the total number of investors in MEAPT increased to 1072 reporting a year-on-year increase of 72%. While venture capitalists are amongst the most active backers of the ecosystem, the space has evolved over the years to include big corporates, investment companies, accelerators, and corporate venture capitalists.
Corporate venturing or corporate venture capital has experienced momentous growth over the years. In the Emerging Venture Markets, Corporate VCs investing in startups has increased by almost three folds in the past five years. While the number of CVCs is limited as compared to venture capitalists, the opportunity they present to corporations to invade the tech space is promising. It is vital for corporations to stay ahead in the game of innovation. Over the years, the realization has emerged that investing in external startups can present a mutually beneficial opportunity as opposed to building a technologically innovative setup from scratch. For startups, Corporate VCs provide in-depth industry knowledge, and access to potential customers, not to mention investment, especially in times of dwindling capital streams and cautious investors. It is more of a symbiotic relationship, the startup gets access to the assets of the parent investment company while increasing the sales and profits of the corporation’s own businesses, and there is a possibility of an easy exit in the future by getting acquired by the parent company.
Access our suite of FY2022 reports covering MENA, Africa, Pakistan & Turkey.
*Data obtained from the Investor Analysis tab of our Analytics tool
In MEAPT, the CVC space is relatively nascent as compared to its peer global markets. In 2021, the number of participating corporate ventures doubled from what we saw the year before, as tracked by our real-time Analytics tool. Last year, corporate venture participation surpassed 2021’s numbers accounting for 17% of the total investors that deployed capital across MEAPT. Interestingly the space in MENA is mostly dominated by regional corporate venture capitalists. Almost 70% of the total CVCs that backed MENA-based startups last year hailed from the region itself. Over the past five years, Raed Ventures, the venture investment arm of Almajdouie Holding, Wa’ed Ventures, the entrepreneurial venture capital arm of Saudi Aramco, and Jordan-based Beyond Capital have participated in the most number of deals.
In terms of capital deployment, Japan’s SoftBank of SoftBank Group has deployed close to $100M in MENA-based startups including the likes of MEGA round raisers Unifonic and Kitopi. An interesting shift in the VC dynamics in the MENA region is the interest shown by telecommunication players in the space. Saudi Telecom Company and Etisalat have each launched their venture arms (STC Ventures and E&) with the former deploying over $100M in funding in MEAPT-based startups. We have also witnessed industry-specific CVCs like EdVentures which was launched by Nahdet Misr Publishing Group to invest in EdTech startups in MENA and Africa.
*Data obtained from the Investor Analysis tab of our Analytics tool
On the other hand, CVCs in Sub-Saharan Africa are mostly international. While Africa has seen higher investor participation than MENA, more corporate venture capitalists have backed startups in the latter region. Among the most active corporate investors in the continent are France-based Orange Ventures and the Africa Investment Fund of Google. Investments for Orange Ventures have ranged from FinTech to Telecom and E-commerce while Google’s sole focus has been the Gaming industry in Africa.
This piece was developed using data sets from our real-time Analytics tool.
Get full insight into this startup scene. Access real-time data on 7000+ investors in the EVMs