March 8, 2022

Video explainer: What happened to CVC funding during Covid?

CVC investors have a reputation for holding back during turbulent times — but during the 2020 pandemic they increased spending

Watch our innovation editor Maija Palmer discuss why we've picked this chart and what makes it so interesting.

Corporate venture capital has tended to suffer from a reputational issue. There is a perception that corporate investors can disappear when the economy takes a downturn. When companies face problems, extra funding for investments may not be forthcoming.

This reputation has made some startups hesitant at taking money from CVC funds.

But the latest figures on CVC investment during the Covid pandemic show that this expectation may no longer hold water. According to research by Silicon Valley Bank and Counterpart Ventures, CVC spend did not decrease during 2020. If anything, corporate venture funds increased the amount they spent. 

The study was relatively US-focused. Although the responses came from 106 CVC firms, spread across 10 countries and four continents, just over 80% are US-based.


The CVC funds were divided into four categories. Strategic, hybrid and financial represent the focus of the CVC unit, while the fourth category, bellwether, is a cohort of 20 CVCs which SVB and Counterpart identified as leading outliers, based on their historical track record, current scale and investment velocity.

Regardless of category, the vast majority of CVCs said they increased their pace of investment during 2020, or at least maintained it. The outlier bellwether firms were, maybe unsurprisingly, more likely to have increased their pace of investment — but perhaps not by as big a margin over others as their status might suggest.

Of the minority of CVC units that reported a slowing down of their investment activity, SVB and Counterpart say that they were overwhelmingly those whose core parent businesses had been significantly and adversely impacted by the pandemic.

The study has left us with a few questions — and we'd love to hear your thoughts on these: 

  • Given that more than 80% of respondents were US-based CVC funds, is there anything to suggest that this upbeat picture was unique to the US… or is it indeed consistent in Europe?
  • Was this a story of opportunism during market turbulence (never waste a crisis, as they say) or more a story of greater risk appetite despite prevailing conditions?
  • Or does this data simply reveal the increasing maturity of corporate innovation efforts and the widespread support and commitment that they find in boardrooms and executive teams today versus 10 years ago?