Corporate investment in U.S. start-ups rises 16 percent in second quarter: report

SAN FRANCISCO, Thu Sep 20, 2012 – Corporate-backed venture groups invested $2.1 billion in the quarter ended June 30, up 16 percent from the same period in 2011, underscoring the continued allure start-ups hold for their more established competitors.

The corporate-backed funds invested in some 118 companies in the United States, according to a report released on Thursday by consultancy CB Insights, with internet companies winning almost one-third of the cash.

Healthcare and the automotive/transportation sectors each took 20 percent.

Most deals involved co-investors from traditional venture capital firms such as First Round Capital, Index Ventures, and Sequoia Capital.

Big companies like to invest in start-ups to keep an eye on potential new technologies and players in their fields. Financial gains are typically are less important than the strategic insights the bigger companies gain.