Coca-Cola, Wal Mart, Disney. We don’t typically associate names like these with tech or tech investing, but in the last few years all 3 and many old-line Fortune 500 stalwarts like them have plunged into startup investing and M&A.
In fact, traditional Fortune 500 companies without software or internet in their DNA have made four $1B+ tech acquisitions since 2012 (see other data points in TWID below).
The pace of innovation is quickening, and the Fortune 500 knows it will have to either build new tech or acquire/absorb it through dealmaking. Or be dead.
As a cautionary tale, book retailer Barnes & Noble was one of the 15 companies — none of them tech — to drop off the Fortune 500 this year (almost 30 dropped off last year). Unable to compete effectively with Amazon online or in e-readers, B&N is now one example of the ongoing retail apocalypse. To add insult to injury, Amazon is now on a spree opening physical bookstores nationwide.
Our Fortune 500 Tech Investment And M&A report includes rankings of the most active among the traditional Fortune 500, and takes a close look at some of the more notable M&A deals.
short POTUS
If Zuck does run for president in 2020 and wins, at 5’7” he would be the shortest president since William McKinley. And the height of all the presidents since Jimmy Carter have been ~6 feet, meaning that President Zuck would definitely be an outlier from a vertical perspective.
P.S. On Tuesday we’re diving into emerging startup hubs outside of the usual suspects (Silicon Valley, London, Shanghai, etc.). Sign up for the briefing.
This week in data:
$110M: The competition among media streaming companies in Asia is heating up with a $110M deal this week to Hong Kong-based streaming service PCCW International OTT, a subsidiary of PCCW Media. Round investors Foxconn Technology Company, Hony Capital, and Temasek Holdings are taking an 18% stake in the streaming outfit, which encompasses properties like Viu, Vuclip, and MOOV that are popular in countries across Asia, the Middle East, and Africa. The $110M round closed just days after iFlix, the “Netflix of Asia,” secured $133M in a round led by Hearst Corporation. Apple, which recently hired two top Sony executives, is also extending into the space: the company will set aside ~$1B to develop its own video content in 2018.
51%: The share of total private tech investments made by “non-tech” Fortune 500 companies so far in 2017, compared to their tech industry counterparts. Should current investing trends continue, 2017 will mark the first year in which non-tech companies on the Fortune 500 — like Goldman Sachs, 3M, and Wal Mart — make more tech startup investments than prominent tech players like Facebook and Google. In fact, private tech investments by non-tech Fortune 500 corporations grew 149% between 2013 and 2016. Click here to access our full Fortune 500 Tech Investment And M&A Report.
$1B: In another sign of the so-called retail apocalypse, the market capitalization of JCPenney is just over $1B today, compared to $30B when the company was at its peak in June 1998. The company’s stock hit an all-time low this week, falling below $4 per share on August 11. To try to help other brick-and-mortar chains avoid a similar fate, startups are outfitting retailers with augmented reality, beacons, wearables, and more to bridge the gap between digital and physical shopping. Meet 150+ innovative companies in our Retail Store Tech Market Map.
$1.35B: The total funding raised by Indonesian-based online mall Tokopedia, following its $1.1B Series F round from Alibaba Group yesterday. Tokopedia operates an online marketplace to facilitate the selling of goods to consumers in Indonesia, which is Southeast Asia’s biggest economy and a member of the 50+ startup frontier markets featured in our Rise of the (Global) Rest report. In the report, we profile rising venture capital activity in Indonesia, and spotlight the investors and funding history of Tokopedia.
80%: The share of the Indonesian population that does not have a formal bank account, according to research cited in our recent dive into fintech trends in the Southeast Asian country. With smartphone penetration in Indonesia growing (and helping serve the nation’s unbanked or underbanked individuals), fintech deal activity has also seen steady growth in the region since 2012, and is poised to reach a record 33 deals for full-year 2017. Indonesian startups operating in P2P lending, merchant payments, and e-commerce lending have attracted VC investment within the last year.
43 Million: The number of people that tuned in online to watch a world championship event for the video game League of Legends last year, according to a Nielsen analyst quoted in the Wall Street Journal earlier this week. In the latest sign of the rising interest in e-sports among stakeholders in the traditional media and entertainment industries, Nielsen announced this week it has begun measuring the financial value of sponsoring videogame teams and competitions, and is conducting surveys to count the number of people who identify as e-sports fans. In its first round of analysis, Nielsen found global e-sports event sponsorships ranging in value from $75,000 to nearly $17 million. Razer, which hosts live video game streaming of e-sports competitions, recently filed to go public on the Hong Kong Stock Exchange. E-sports startups in the CB Insights database have seen 35 deals and $111.7M in funding so far in 2017.
0.5: The percentage point increase in the share of manufacturing employees to voluntarily leave the their jobs over the last two year, which has climbed from 1.1 percent in June 2015 to 1.6 percent today, according to Bureau of Labor Statistics data cited Tuesday in the Washington Post. (For comparison, the broader economy’s quitting rate rose just 0.1 percentage point over the same period.) For insights into the digitization and automation trends affecting employment in factories and warehouses, check out the deep dive in our recent IIoT and Advanced Manufacturing webinar.
4.4M: Former President Obama’s tweet last Saturday evening quoting Nelson Mandela and denouncing racial hatred was the most-liked in Twitter’s history, collecting 4.4M likes as of today. Obama was among the many political and business leaders issuing statements or memos denouncing hate, including leaders at Apple, Google, and IBM. Mark Zuckerberg’s Facebook post with a similar message received 254,000 likes.
26%: The percentage of US adults who engage in pubic hair grooming who reported a grooming-related injury, according to a new study published in the journal Jama Dermatology. Cuts were the most common injury, accounting for 61% of mishaps; 23% were burns, likely from waxing or hair-removal creams. Researchers from the University of California at San Francisco launched the study to determine why 3% of ER visits related to “genitourinary injuries” stem from grooming. To see where on the body pubic hair grooming injuries tend to happen (NSFW illustrations), click here. To learn about the startups and products that are reshaping the personal care and grooming industries, check out our Beauty Tech Market Map and our client-only Beauty Tech Revolution research.
