Google’s venture capital arm Google Ventures has just gotten an extra $100 million to push its $200-million a year fund to an impressive $300-million. The new cash allocation has made Google Ventures a part of the elite club of corporate venture-capital funds in the world. The extra money means that Google Ventures will have a lot more options in how it uses its money and will give the VC fund the ability to look at and invest in later-stage financing rounds for startups. Companies at this stage of the startup cycle usually require each investor to have tens of millions of dollars to participate in investment opportunities and the extra $100 million will open avenues for Google Ventures to capitalize on this sector.
In the grand scheme of things, Google Venture is a new comer to the corporate VC game and giants like Intel’s Intel Capital have been at it for quite some time and have at their disposal $300 to $500 million a year. The new cash will help the fund compete with Intel and as Bill Maris, managing partner of Google Ventures says, “It puts a lot more wood behind the arrow if we need it.”
A major reason for the increase of funds from Google is the fact that when Google Venture got started in 2009, it funded a number of small ventures who have now grown and new late stage rounds of funds. These rounds will require a lot more cash than previous rounds if Google wants to claim a bigger stake in these firms.
Google Ventures strategy has been to inject cash into 40-50 seed-stage deals every year. The company usually invests a quarter of a million dollars or less in to these firms and does another 15 deals for $10 million or less. The $20 to $50 million range is reserved for approximately one or two deals a year. The startups that Google Ventures looks at are all over the board and are not simply reserved to particular sections of the industry. The company has stakes in medicine, clean power and technology.
Current companies on the portfolio include smart-thermostat company called Nest and Foundation Medicine, a firm that uses genomic analysis for cancer care. However, none of the firms on the list are super star startups like Instagram and Twitter.
Source: The Globe and Mail
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