Non-VC investors have plowed into startup investing in the last few years. Specifically, corporates, hedge funds, and mutual funds have backed many of the mega-financings to tech startups, helping buoy their number in 2015 to more than 180, compared to 104 the year before.
But how does the participation of these “unusual suspects” compare to those of traditional VC? We analyzed the composition of investors in the 440+ mega-deals that occurred since 2011. We tallied the investor type of each participation (i.e., investors were counted each time they took part in a deal). In total there were 1,836 participations, and we calculated the share accounted for by each investor type within this pool to arrive at the distribution of investor types in $100M+ rounds.
We found that VC participation in mega-rounds has slowed relative to the participation of other investors.
VCs accounted for 47% of the total participations in mega-rounds 2010 and a majority (53%) in 2011. But that share has dropped significantly to just over a third of participations in 2016 year-to-date.
Crossover investors — entities like mutual funds and hedge funds that normally focus on the public markets — have played an increasingly prominent role in 2014 and 2015, accounting for more than a fifth of participations in each year. Corporates had a strong year in 2015, seeing a peak of 20% share of participations in $100M+ rounds.
The “other” category in the chart above includes sovereign wealth funds, family offices, and other non-VC investors that can’t be classified as corporates, private equity, or crossovers.
Top investors into mega-rounds
The most active participants in $100M+ rounds into tech companies are a mix of crossover investors, VCs, and others. Tiger Global topped the list participating in more than 40 $100M+ deals since 2010, followed by DST Global which was the only other investor with more than 30 $100M+ deals, having invested in companies like Wish, Slack and Olacabs. Accel Partners and Andreessen Horowitz were the top VC participants in mega-rounds, with 28 a piece since 2010.
| Investor | Number of Deals |
|---|---|
| Tiger Global Management | 41 |
| DST Global | 34 |
| Accel Partners | 28 |
| Andreessen Horowitz | 28 |
| Fidelity Investments | 28 |
| Kleiner Perkins Caufield & Byers | 24 |
| T. Rowe Price | 22 |
| Tencent | 22 |
| Wellington Management | 22 |
| Goldman Sachs | 22 |
| Temasek Holdings | 21 |
| Sequoia Capital | 20 |
| Sequoia Capital China | 20 |
| Insight Venture Partners | 20 |
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