While some big tech companies are pressing pause on investments during the coronavirus outbreak, others are making outsize bets. In this CBInsights Research Brief, we see how Covid-19 has influenced some tech giants to take advantage of the uncertainty to make strategic moves.
Here are some of CBInsight’s findings:
- Facebook, Amazon, Microsoft, Google, and Apple (FAMGA) stocks have all outperformed the overall market since the Covid-19 outbreak was declared a pandemic on March 11, as consumers spend more time and money online.
- As such, these big tech companies may be more comfortable deploying capital into strategic investments and acquisitions. FAMGA companies invested in fewer companies than typical in the first quarter of the year, but Q2’20 is tracking at a near record run rate and funding has increased as the firms make larger bets.
- So far in Q2’20, quarterly equity funding with FAMGA participation has hit a record high due to Facebook’s massive $5.7B solo investment in Reliance Jio. In fact, 2020 annual funding has already surpassed 2019’s total, making this a record year despite the coronavirus outbreak.
Amazon and Facebook are the most active investors, focused on India
- Facebook and Amazon have each participated in equity rounds to 2 companies since the WHO declared Covid-19 to be a pandemic on March 11, and both are focusing their investments in India.
- In April, Facebook invested $5.7B for a 10% stake in India’s largest telecom operator, Reliance Jio. This investment is reportedly the largest corporate minority financing ever made by a tech company globally as well as the largest foreign direct investment in technology in India’s history.
- Facebook also participated in a round to tech strategy consulting organization Tech Matters during this time period.
- Both of Amazon’s 2020 investments have gone to India-based companies. Since the pandemic declaration, the e-commerce giant has participated in a $3.8M Series D tranche to loan & insurance policy aggregation platform BankBazaar and a $15M Series E to SMB lending startup Capital Float. These India-based fintech investments highlight that Amazon is looking to further deepen its footprint in the region.
Apple & Microsoft Focus on Acquisitions
- Apple, Google, and Microsoft have not invested in any companies from their corporate arms since the advent of the pandemic. However, both Apple and Microsoft have been acquisitive, purchasing 5 companies total since the start of the pandemic.
- Apple has purchased 4 companies this year and 3 since the start of the Covid-19 crisis: weather app Dark Sky, speech recognition startup Voysis, and VR event streaming company NextVR. The company is reportedly taking advantage of compressed valuations due to the pandemic to buy companies cheaply.
- Microsoft has also made 2 purchases since the beginning of the pandemic — it acquired Massachusetts-based 5G cloud startup Affirmed Networks for nearly $1.4B at the end of March and IoT cybersecurity startup CyberX for $165M in May.
To see CB Insight’s charts and visual captures of this information, click here.