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Promoting independence of portfolio companies and fostering an open culture helping them become the leading CVC

Key facts

  • Alphabet/Google’s corporate VC fund¹ was set up in 2009, with a $100 million capital commitment.
  • Google VC is one of the most active and successful corporate VCs, employing 80 people with over $2 billion under management.
  • YTD 2015 Google Ventures has invested close to $ 1.4 billion across North America and Europe.

Uniqueness

  • In addition to providing product design services which at times are 10 times faster than traditional agencies, Google Ventures also hosts workshops intended to hone the product management or operational skills of the founders and employees of portfolio companies.
  • Google Ventures’ use of analytics and algorithms to assess deals before deciding where to invest and analyse as much data as possible differentiates it from competitors. However, it is important to note that the data informs but does not take the final investment decision.
  • Although funds for Google VC are provided by Google, portfolio companies remain independent and don’t have to benefit Google. Invested companies can even be acquired by competitors.

Value

  • Google Ventures has already completed 50+ successful exits, with returns far above the market averages of other venture capital funds.
  • They have invested in 225+ portfolio companies encompassing all stages and industry sectors, including unicorns such as Uber, Nest, 23andMe, Cloudera, Optimizely, TuneIn, Homejoy and High Fidelity.

Approach

  • Google Ventures benefits from Google’s network of employees. Employees ae encouraged to find potential companies, and they are rewarded with a $10,000 finder’s fee should investment take place.
  • The portfolio companies enjoy independence, access to Google Ventures’ partners and unique access to some of the best engineers, scientists and technology in the world.
  • Another success factor that has helped Google is acceptance of the possibility that competition and disruption can come from the VC arm.

Google Ventures is one of more than 100 case studies identified as part of the World Economic Forum’s Digital Transformation of Industries initiative.  An overview of the DTI program can be found here.

1. Sources: Google Ventures, WEF/Accenture Analysis

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