CVC's M&A Intentions

2024
.
11
.
08
JAPAN CVC SURVEY

In corporate venture capital (CVC) investment activities, M&A is an important strategic option. The JAPAN CVC SURVEY 2023 sheds light on the latest trends in M&A strategies within Japanese CVCs.

Basic Stance on M&A

【Overall Trends】
・40%: No particular focus on M&A
・43%: View M&A as a pure exit strategy
・5%: Consider M&A as an important premise for investment decisions
・3%: Conduct investment activities with M&A as the primary objective

Key Considerations When Considering M&A

  1. Strategic Aspects: Potential business synergies, opportunities for technology acquisition, market entry acceleration
  2. Organizational Aspects: Feasibility of PMI (Post-Merger Integration), securing internal resources, post-integration organizational structure
  3. Timing: Growth stage of the investment target, market environment changes, competitive landscape

Main Challenges

・Valuation setting
・Conducting due diligence
・Aligning investment decisions with M&A decisions
・Internal consensus-building process

■Summary

M&A strategies in Japanese CVCs are largely divided into two groups: 43% view M&A as a pure exit strategy, and 40% do not focus on it. This shows that CVCs do not consider M&A as an absolute objective, adopting a more flexible exit strategy approach.

Notably, only 3% of CVCs engage in investment activities with M&A as their main goal. This suggests that most CVCs treat investment activities and M&A as separate strategic options, flexibly utilizing them based on the situation.

In the future, with the progress of open innovation, the organic integration of investment activities and M&A is expected to become more important. CVCs will need to maintain a balanced approach, keeping M&A possibilities in mind from the early stages of investment while ensuring flexible strategic options.

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