Benchmarking Corporate Venture Capital

The Presentation inside:

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@cbinsights #corpvcdata 1

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About Our Presenter – Matthew Wong . @mlcwong [email protected] • Research and Data Analyst, CB Insights • Published research and data analysis have been featured in The New York Times, Wall Street Journal, Financial Times, Bloomberg among other major media outlets. • TV appearances on Al-Jazeera, Bloomberg TV, and BNN. • Graduate of Northwestern University with B.S., magna cum laude. @cbinsights #corpvcdata 4

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IN THE NEXT 35-45 MINUTES, WE’LL COVER… 1 2 3 4 5 Corporate venture capital rising Macro trends in corporate venture capital Quantifying corporate VC within venture How big is the role of corporate venture within the greater venture capital ecosystem? Where corporate VC is investing The sectors and hot areas where corporates are investing in Case study – Google Ventures A deep dive inside portfolio and strategy of the most prolific investor in corporate venture. Where is Google looking? Benchmarking corporate venture funds Comparing corporate VC funds by focus area @cbinsights #corpvcdata 9

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CORPORATE VENTURE CAPITAL RISING Macro trends in corporate venture capital @cbinsights #corpvcdata 10

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VC PERCEPTIONS OF CORPORATE VENTURE CAPITAL VCs have not been shy when it comes to critiquing the role of corporate investors in the venture business. “I do think that venture investing is not the best use of a corporation’s capital and that it is inevitable that it will produce sub-par returns at best and significant losses at worst.” “Legendary VC Ted Dintersmith of CRV once said to me, about taking capital from strategics, ‘Be careful. You’ll have sold your company. You just won’t know it.’” - Fred Wilson, Union Square Ventures, July 2008 - Micah Rosenbloom, Founder Collective, September 2014 @cbinsights #corpvcdata 11

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2015: CORPORATE VENTURE CAPITAL ON TRACK FOR NEW HIGHS The first half of 2015 saw corporate venture capital investors participate in 357 deals totaling $7.85B. At the current run rate, corporate VC deal activity in on track to top 2014’s high. Funding dollars involving corporate VC arms has topped $3B in each of the last 3 quarters. @cbinsights #corpvcdata 13

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CALIFORNIA STAYS DOMINANT FOR CORPORATE VENTURE DEAL ACTIVITY California has taken 50%+ of all CVC deals in four of the last five quarters. Massachusetts and New York have been swapping positions for the No. 2 spot and saw a nearly equal amount of deal share in Q2’15. @cbinsights #corpvcdata 14

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CORPORATE VC SEED DEAL SHARE DROPS In Q3’14 and Q4’14, seed activity made up 1 of every 5 deals done by corporate venture arms. There’s been a significant pullback in 2015. Each of the past two quarters saw seed deals take just 11% of CVC deal activity. @cbinsights #corpvcdata 15

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INTERNET DEALS TAKE HALF OF ALL CVC DEALS IN Q2 Corporate venture deal share to the Internet sector hit a five-quarter high in Q2’15. Mobile deal share by corporate venture arms has topped that in healthcare in three of the last five quarters. @cbinsights #corpvcdata 16

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QUANTIFYING CVC WITHIN VC How big is corporate venture within the greater venture capital ecosystem? @cbinsights #corpvcdata 17

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CVC DEAL SIZES ARE NOW DECIDEDLY LARGER THAN VC OVERALL Average deal size with corporate venture participation has topped $21M+ in five of the last six quarters. In contrast, average corporate venture deal sizes stood ≤$17M in 2013. @cbinsights #corpvcdata 18

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CORPORATE VCs PARTICIPATE IN 1 OF EVERY 5 VC DEALS IN 2015 Corporate venture firms participated in just over 20% of the 1,768 venture-backed rounds in the first half of 2015. That’s compared to CVCs participating in 15% of venture deals in H1 2013. @cbinsights #corpvcdata 19

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NUMBER OF ACTIVE CORPORATE VENTURE FIRMS IS UP 82% SINCE Q1’12 106 different corporate VC firms completed an investment in Q1’15 – a multi-year high. That’s a 82% jump from the same quarter three years ago. @cbinsights #corpvcdata 20

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38 CORPORATE VCs COUNT A UNICORN IN THEIR PORTFOLIO It’s not just VCs who are hunting unicorns. Among the 74 US private companies valued at $1B or more, 51% have a corporate venture unit as an investor. Source: @cbinsights #corpvcdata 21

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THE CORPORATE VCs THAT COUNT THE MOST UNICORNS Salesforce Ventures narrowly edges out Google Ventures for the most investments in US unicorns. 8 different corporate venture groups count 3 or more unicorns. Source: @cbinsights #corpvcdata 22

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CERTAIN UNICORNS COUNT MORE STRATEGIC INVESTORS THAN THE REST Docusign, the e-signature and digital transaction firm, has received backing from a notable 10 corporate venture groups. There are 7 US unicorns with 3 or more corporate venture investors. Source: @cbinsights #corpvcdata 23

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KLEINER PERKINS IS MOST FREQUEST VENTURE CAPITAL COINVESTOR WITH CVCs Kleiner Perkins and NEA are the most frequent co-investors with CVCs since 2010 followed by Andreessen Horowitz. Source: @cbinsights #corpvcdata 24

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THE TOP VC FIRMS BY SHARE OF CVC-SYNDICATED DEALS Between Q1’10 and Q2’15, Kleiner Perkins has completed 29% of its deals with a corporate venture unit. Venrock and DFJ round out the top 3 by share of CVC-backed deals. Source: @cbinsights #corpvcdata 25

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THE MOST ACTIVE CORPORATE VENTURE CAPITAL GROUPS CVC Investor @cbinsights Recent New Investments #corpvcdata 26

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THE MOST ACTIVE CORPORATE VENTURE CAPITAL GROUPS CVC Investor @cbinsights Recent New Investments #corpvcdata 27

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APPENDIX: 117 ACTIVE CORPORATE VENTURE CAPITAL FIRMS 117 Active Corporate Venture Capital Investors Q3'14 - Q2'15 1 - 29 30 - 58 59 - 87 88 - 117 Google Ventures Dell Ventures kbs+ Ventures Rex Health Ventures Intel Capital Google Capital Hewlett-Packard Ventures DSM Venturing Qualcomm Ventures Recruit Strategic Partners Liquidity Ventures Robert Bosch Venture Capital Salesforce Ventures Liberty Global Ventures Wells Fargo Startup Accelerator Volvo Group Venture Capital Comcast Ventures Presidio Ventures Fosun Kinzon Capital Xandex Investments Fidelity Biosciences BBVA Ventures Simon Venture Group ICG Ventures GE Ventures Time Warner Investments MS Ventures Astellas Venture Management Bloomberg Beta Amgen Ventures BP Ventures Motorola Solutions Venture Capital Novartis Venture Funds Novo Ventures dunnhumby Ventures Follett Knowledge Fund Cisco Investments KDDI Open Innovation Fund Takeda Ventures Applied Ventures Samsung Ventures Renren Lianhe Holdings GM Ventures Boxer Capital In-Q-Tel MedImmune Ventures Transamerica Ventures Legend Capital Microsoft Ventures Total Energy Ventures International BlueCross BlueShield Venture Partners SanDisk Ventures Pfizer Venture Investments Baxter Ventures UPS Strategic Enterprise Fund Broadway Video Ventures Bertelsmann Digital Media Investments NTT DoCoMo Ventures Fletcher Spaght Ventures MemorialCare Innovation Fund Lilly Ventures Telstra Ventures Western Digital Capital Twitter Ventures Siemens Venture Capital Rakuten Ventures Boulder Brands Investment Group GREE Ventures Hearst Ventures WuXi Corporate Venture Fund Zaffre Investments UMC Capital Merck Global Health Innovation Fund Chevron Technology Ventures DMG Information Shea Ventures Kaiser Permanente Ventures Saudi Aramco Energy Ventures TELUS Ventures Brace Pharma Capital DG Incubation Constellation Technology Ventures Monsanto Growth Ventures Merck Research Ventures Fund Verizon Ventures American Family Ventures Link-age Ventures Axel Springer Digital Vetures Citi Ventures Credit Suisse NEXT Investors T-Venture Castrol innoVentures Mitsui & Co. Global Investment American Express Ventures Aster Capital WPP Digital SR One Reed Elsevier Ventures Adobe Ventures Geekdom Fund Johnson & Johnson Development Corporation Syngenta Ventures MassMutual Ventures R/GA Ventures CAA Ventures Sanofi-Genzyme Ventures Telefonica Ventures Steamboat Ventures Roche Venture Fund Karlani Capital E.ON Venture Partners BMW i Ventures Ascension Ventures SingTel Innov8 First Data Ventures SABIC Ventures Nissay Capital @cbinsights #corpvcdata 28

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WHERE CORPORATE VCS ARE INVESTING Sector-level trends and hot areas @cbinsights #corpvcdata 29

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INTERNET CVC DEALS JUMP TO MULTI-YEAR HIGH After dropping for three consecutive quarters, corporate VC deals in the Internet sector jumped to a quarterly high in Q2’15. Internet funding with CVC participation hit $2.3B behind several $100M+ deals. @cbinsights #corpvcdata 30

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NEW YORK DOMINATES MASSACHUSETTS FOR INTERNET CVC DEAL SHARE New York took nearly 1 of every 5 CVC deals in Internet in Q2’15 and topped Mass. in each of the last five quarters. California’s Internet CVC deal share has remained at 50%+ since Q2’14. @cbinsights #corpvcdata 31

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INTERNET CVC SEED DEAL SHARE FALLS IN 2015 After topping 20% in Q2’14-Q4’14, corporate VC seed deal share in Internet fell to 11% in Q1’15 and 13% in Q2’15. Series C CVC deal share hit a five-quarter high at 17%. @cbinsights #corpvcdata 32

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CORPORATE INVESTMENTS IN MOBILE FALL The first half of 2015 saw corporate VCs deployed 7% less deals than the same period last year. After Uber’s $1.2B round buoyed Q2’14, mobile funding with corporate participation has stood at $400M+ in each of the last three quarters. @cbinsights #corpvcdata 33

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CALIFORNIA STAYS HOT FOR CORPORATE VC DEALS IN MOBILE California has taken over half of all corporate VC mobile deals in each of the past five quarters. @cbinsights #corpvcdata 34

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CVC SEED DEAL SHARE IN MOBILE FALLS TO LOW Mobile seed deal share by corporate VCs fell to just 8% in Q2’15, after taking 40% of all mobile deals in the same quarter last year. Mobile Series A and Series B deal share both hit five-quarter highs. @cbinsights #corpvcdata 35

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CORPORATE VENTURE FUNDING TO HEALTHCARE SEES BIG FIRST HALF OF 2015 Healthcare CVC funding hit $1.59B in the first half of 2015, a jump of 35% from H1 2014. Corporate funding participation in healthcare has topped $650M in each of the last three quarters. @cbinsights #corpvcdata 36

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HEALTHCARE CVC DEAL SHARE SHIFTS BACK TO CALIFORNIA After taking just 19% of healthcare CVC deal share in Q4’14, California activity has risen in each of the past two quarters and hit 35% in Q2’15, topping Mass. after ceding the lead in Q4’14 and Q1’15. @cbinsights #corpvcdata 37

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CORPORATE VCs PURSUE FEWER EARLY-STAGE HEALTHCARE DEALS In Q4’14, Series A deals took half of all corporate VC activity in healthcare. But early-stage share has fallen for the last two quarters as Series A share hit a four-quarter low. @cbinsights #corpvcdata 38

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DIGITAL HEALTH / HEALTH IT DEALS BY CVCs JUMP Corporate venture deals into the growing digital health and health IT arena rose 44% between 2011 and 2014. NOTABLE CVC INVESTORS Select investments Select investments Select investments @cbinsights #corpvcdata 39

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CORPORATE VCs DIVE INTO FIN TECH Corporate venture deals into financial tech or ‘fin tech’ ticked up 75% between 2011 and 2014. NOTABLE CVC INVESTORS Select investments Select investments Select investments @cbinsights #corpvcdata 40

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CYBERSECURITY CVC DEALS HIT HIGH IN 2014 As reported threats continue to rise, corporate venture deals into cybersecurity rose 25% on a YoY basis in 2014 and hit a quarterly high in Q3’14. NOTABLE CVC INVESTORS Select investments Select investments Select investments @cbinsights #corpvcdata 41

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CASE STUDY: @cbinsights #corpvcdata 42

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JULY 2008: GOOGLE VENTURES REVEALED “How the group will be structured and what sort of investments it is likely to target is unclear… The Mountain View, Calif., Web giant has long preferred to buy companies rather than invest in them, and has plenty of cash to keep doing so. With an abundance of VC money available today, Google will have to convince entrepreneurs that it has something to offer that other investors don’t. - ‘Google to Extend Reach With VentureCapital Arm,’ Jessica Lessin, July 31, 2008 Source: @cbinsights #corpvcdata 43

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THE MOST PROLIFIC FIRM IN CORPORATE VENTURE CAPITAL In 2014, Google Ventures participated in just under 100 new and follow-on deals, the most in any year since its inception. The prolific CVC has slowed its pace in 2015, completing 39% less deals in H1 2015 than H1 2014. Source: @cbinsights #corpvcdata 44

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GOOGLE VENTURES INDUSTRY FOCUS: SECURITY & HEALTH GAIN PROMINENCE Since the start of 2014, Google Ventures has placed a large strategic emphasis on cybersecurity (ex. Duo, Ionic, Threatstream, Synack) and a broader push into digital health (ex. Transcriptic, Spruce, Flatiron Health). Companies within the realm of “big data” and data analytics have also been a recent focus area (ex. Rocana, MapD, Cohesity). Source: @cbinsights #corpvcdata 45

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GOOGLE VENTURES GEOGRAPHY STRATEGY: INCREASED INTEREST IN NEW YORK More recently, Google Ventures has identified more opportunities in New York. In 2012 and 2013, Google Ventures participated in 13 NY deals. Since then, Google Ventures has doubled down, completing 16 deals including a $130M investment into Flatiron Health. Source: @cbinsights #corpvcdata 46

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GOOGLE VENTURES STAGE STRATEGY: EARLY-STAGE TAKES 65%+ OF DEALS While all stages of investment have seen increases over the last five years, the biggest growth has been in the early rounds, with 66% of deals taking place in Seed or Series A rounds over the past five years. Source: @cbinsights #corpvcdata 47

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GOOGLE VENTURES – NEW vs. FOLLOW-ON INVESTMENTS As Google Ventures’ portfolio matured since the firm’s launch in 2009, follow-on investments have surged. Google Ventures completed twice as many follow-on deals as it did new deals in Q2’15 — the highest percentage of follow-on deals it has ever done in a single quarter. Source: @cbinsights #corpvcdata 48

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MEGA-FINANCINGS BUMP UP DEAL SIZES BY GOOGLE VENTURES Google Ventures has participated in a number of mega-financings — including those to Uber and Cloudera — which have served to drive up the median size of its deals. In Q2’15, Google Ventures’ median deal size swelled to $15M behind large rounds including Cohesity’s $55M Series B. Source: @cbinsights #corpvcdata 49

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GOOGLE VENTURES LARGEST DEALS IN THE HEADLINES Google Ventures Largest Deals Over Time Since 2011 Jan 2011 @cbinsights Jan 2012 *Selected deals @cbinsights Jan 2013 Jan 2014 Jan 2015 Date of Partnership #corpvcdata 50

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ANALYZING GOOGLE VENTURES’ INVESTMENT SYNDICATE Google Ventures often does deals with other VC firms such as Kleiner Perkins, SV Angel, and Andreessen Horowitz. Several of Google Ventures’ top co-investors are also among its top deal flow sources, including Kleiner Perkins, First Round Capital, and SV Angel. Y Combinator is a top feeder of deal flow to Google Ventures. Source: @cbinsights #corpvcdata 51

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BENCHMARKING CVCS Comparing corporate VCs by focus area @cbinsights #corpvcdata 52

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INTEL CAPITAL TOPS CORPORATE VC FIRMS BY EXITS Since the start of 2011, Intel Capital has realized the highest number of M&A or IPO exits followed by Google Ventures. *Exits by Comcast Interactive Capital since 2011 were counted under Comcast Ventures @cbinsights #corpvcdata 53

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COMPARING SELECT CORPORATE VCs: TECH Number of New Deals Per Year Median Deal Size Most Frequent Stage 50-60 CVC Investor $8M Seed 30-40 10-20 $11M $13M Series B Series B 20-30 #corpvcdata Series A 10-20 @cbinsights $15M $15M Series C 54

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COMPARING SELECT CORPORATE VCs: HEALTHCARE Number of New Deals Per Year $17M Series A $14M Series A 1-10 $9M Series C 1-10 $10M Series A 1-10 #corpvcdata Most Frequent Stage 1-10 @cbinsights Median Deal Size 1-10 CVC Investor $24M Series B 55

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COMPARING SELECT CORPORATE VCs: MEDIA Number of New Deals Per Year Median Deal Size Most Frequent Stage 10-20 $10M Series A 1-10 $15M Series B $8M Series B 1-10 $3M Seed 1-10 CVC Investor $6M Series C 1-10 @cbinsights #corpvcdata 56

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COMPARING SELECT CORPORATE VCs: FINANCIAL SERVICES Number of New Deals Per Year $19M Series C $28M Series B 1-10 $14M Series D 1-10 #corpvcdata Most Frequent Stage 1-10 @cbinsights Median Deal Size 1-10 CVC Investor $19M Series C 57

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HAVE QUESTIONS / WANT ACCESS TO THE UNDERLYING DATA? The underlying financing, acquisition, etc data in this presentation is available on CB Insights. Our Customer Success Team Reach out to your manager. If unsure, email myself or Jonathan McKenna [email protected] [email protected]m Not a Customer? Reach out to Anand [email protected] or Set up a free trial account Existing Customer? @cbinsights #corpvcdata 59

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CVC INVESTOR PROFILES Investor Profile Link Google Ventures Investor Profile Intel Capital Investor Profile Qualcomm Ventures Investor Profile @cbinsights #corpvcdata 60

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CVC INVESTOR PROFILES Profile Link Investor Salesforce Ventures Investor Profile Comcast Ventures Investor Profile Fidelity Biosciences Investor Profile @cbinsights #corpvcdata 61

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CVC INVESTOR PROFILES Profile Link Investor GE Ventures Investor Profile Bloomberg Beta Investor Profile Novartis Venture Funds Investor Profile @cbinsights #corpvcdata 62

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CVC INVESTOR PROFILES Profile Link Investor Cisco Investments Investor Profile Samsung Ventures Investor Profile Microsoft Ventures Investor Profile @cbinsights #corpvcdata 63

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COMPANY PROFILES Profile Link Investor DocuSign Company Profile Uber Company Profile Kabam Company Profile @cbinsights #corpvcdata 64

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COMPANY PROFILES Profile Link Investor FanDuel Company Profile Lookout Company Profile MongoDB Company Profile @cbinsights #corpvcdata 65

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About Our Presenter – Matthew Wong . @mlcwong [email protected] • Research Analyst, CB Insights • Published research and data analysis have been featured in The New York Times, Wall Street Journal, Financial Times, Bloomberg among other major media outlets. • TV appearances on Al-Jazeera, Bloomberg TV, and BNN. • Graduate of Northwestern University with B.S., magna cum laude. @cbinsights @cbinsights #corpvcdata 66

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Web | Twitter | @cbinsights Tel | 212.292.3148 @cbinsights #corpvcdata 67

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