The majority of large corporate venture capital funds are investing in startups at the Series A stage but some are planning to invest earlier, research suggests.
A survey by Mountside Ventures, an accelerator and advisory firm, found that 90% of corporate venture capital (CVC) funds invest in Series A rounds.
CVC is a subset of VC in which corporates take an equity stake in a startup.
Following the global trend of growing VC investment into artificial intelligence startups, the report shows that around 40% of surveyed CVCs invest in B2B companies focused on AI and machine learning.
The survey of 100 global CVC investors – which have more than £20bn in assets under management across over 1,200 startups and VCs – suggests there is some appetite to invest earlier. While 65% say they plan to continue investing at the same stage, 18% plan to invest earlier.
The report also found that since 2010, there has been a “notable” increase in CVCs participating in deals, growing from participation in one in 10 deals to one in four in 2024.
“What is clear from this report is that the availability of corporate funding to startups has never been higher,” said Tom Savage, investment associate at Mountside Ventures. “Our analysis shows that strategic alignment takes priority over financial returns, which may lead to a mismatch of expectations during the growth phase and exit process.”
According to the report, the rise is due to CVCs looking to access the latest technologies and market trends, ensuring they stay at the forefront of global innovation.
Founders seeking access to strategic resources such as unique R&D capabilities, long-term partnerships, exit opportunities, and market validation are also seeing the benefits of working with CVCs and are reportedly considering raising capital from them rather than traditional VCs.
This could be because traditional VCs typically look to exit their investments in five to seven, while CVCs tend to have a longer-term view.
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