Google Ventures Pulls Back the Veil: Deals in San Diego, Boston, Dallas, and Silicon Valley
Just over two years ago, Google decided to get into the venture capital game, setting up a fund to invest in promising startups in much the same way that Silicon Valley VC firms Sequoia Capital and Kleiner Perkins Caufield & Byers invested in Google itself back in 1999. Google Ventures has stayed mostly under the radar since then; word about the organization surfaced just over a year ago, and until recently the only people known to be officially connected with the operation were Bill Maris, the fund’s managing partner, who is based at Google’s Mountain View headquarters, and Rich Miner, a partner based in Cambridge, MA. But in the last week Google Ventures has emerged into the light—unveiling a revamped website that lists its portfolio companies and team members and, today, reaching out to the media.
In a call with reporters early this afternoon, Maris and partner David Krane shared extensive details about Google Ventures’ origins, its mission inside Google, the makeup of its team, the size of its fund (which is much larger than previously reported), the types of companies it hopes to nurture, its plans for growth, and more. We’re working on a full transcript of the call, but for now, I’ve put together a list of the highlights:
* Unconfirmed media reports over the last year have gauged the size of Google Ventures’ investment fund at $100 million. But Maris said today that the fund’s goal is to invest roughly $100 million each year. “It’s not a $100 million fund—that would imply a set size that is then rolled out over four years at, say $25 million a year,” Maris said. “In Silicon Valley terms, it’s probably more on the order of a Sequoia or other funds, in terms of the dollars per year we would invest.” (Sequoia’s funds differ in size by geography; the firm raised $445 million for Sequoia Capital XII, a 2006 fund focused on early-stage U.S. companies.) Maris would not comment on whether Google Ventures invested a full $100 million in its first year.
* Of the 10 companies announced publicly as part of Google Ventures’ portfolio, four are in New England, including Lebanon, NH-based Adimab, Lexington, MA-based English Central, Cambridge, MA-based Recorded Future, and Boston-based SCVNGR. Two are in San Diego: OpenCandy and V-Vehicle. The other companies are Corduro (near Dallas, TX), Pixazza (Mountain View, CA), Silver Spring Networks (Redwood City, CA), and VigLink (San Francisco). The Corduro investment was announced today and is not yet listed on the Google Ventures website. Bruce has written about V-Vehicle’s recent troubles securing a big government loan.
* Google Ventures lists a team of 16, including Maris and Miner. Working from Cambridge are Miner, venture partner Scott Davis (a postdoc finishing studies of cancer imaging at Dartmouth), partner Krishan Yeshwant (a physician and MBA completing a residency at Boston’s Brigham and Women’s Hospital), and associate Luis Garcia, a Harvard MBA student who will join the fund this summer. The remainder of the staff is based in Mountain View. The Google Ventures team includes four women: associate Feng Yuan Xu, who is finishing an MBA at Berkeley’s Haas School of Business; associate Katie Mandel, who formerly worked on product marketing for Google Maps; associate Lindsay Ullman, formerly part of Google’s display ads operation; and administrative assistant Mellisa Levick.
* The primary objective of Google Ventures, Maris said, is generating financial returns for Google. Maris hopes that the fund will eventually be able to “move the needle” for Google financially, even though the company’s existing advertising revenues are stupendous ($6.8 billion in the first quarter of this year alone). “If we were to invest in the next Google or the next YouTube or the next Facebook, that would be material to Google in terms of return, and so that is really our core mission,” Maris said.
* So far, the fund is applying very few if any filters to the types of companies it will invest in. The fund has a preference for companies that might be helped by Google’s infrastructure or Google’s technical talent, Maris says, but the companies do not need to be exploring areas that are of strategic importance to Google. “You are going to look at 1,000 ventures in a year, and maybe 50 are exciting, and you give a close look to five, and you invest in three,” Maris said. “If you create a sieve that says we also need them to be strategically important to Google, that not only implies we know what we will be important to Google five or 10 years from now, which is really difficult, but it also means you might be narrowing the companies down to zero.”
* Google Ventures has announced only one life sciences investment so far—Adimab. (Luke wrote about Google’s effort to pour not only cash but computational power into Adimab’s method for discovering antibody-based drugs.) But Maris, who has a research background in neurobiology, says the company is “aggressively looking at other life sciences companies, and you should expect to see future investments in that area.” Google isn’t interested in funding “a company moving one therapy from Phase 2 to Phase 3 clinical trials,” Maris said. “We are looking for companies that have transformative technologies or are tackling new problems in new ways, things like regenerative medicine to bioinformatics.”
* Google Ventures will likely expand beyond its current footprint at the Googleplex Mountain View and the Five Cambridge Center offices in Kendall Square. “Interesting ventures are not limited to Silicon Valley and Cambridge,” Maris said. “We believe in being where innovation is. So yes, I do imagine [that the fund will open new offices], and stay tuned because that is very possible.”
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