tech champs

Google Ventures Expands Portfolio and Team

Posted by Sheila Shayon on August 9, 2011 03:00 PM

The Googleplex is buzzing, as Google Ventures, the company’s two-year-old independent venture capital arm is doubling its start-up investment budget to $200 million, doubling it office space, and adding new team members.

Its latest: Laura Melahn, Google Ventures' new head of marketing, whose hiring is a sign that Google is ready to get serious about promoting its VC activities.

With three major successes so far — Ngmoco, acquired by Japanese gaming company, DeNA, for around $400 million; HomeAway, went public in June; and Silver Spring Networks, a smart-grid company, which filed for an IPO — the search behemoth is searching for the next Zynga or Facebook.

As the market for start-ups reaches highs not seen in more than a decade, Google has two special ingredients. One, data-driven algorithms to apply as criteria – even when the data is scarce: founders’ track-record to date including how long it took to raise monies

And two, leveraging an unparalleled talent pool of those working for one of the 60 companies Google has already invested in: finding suitable fits for serial entrepreneurs as well as the young and eager.

There’s even a Googlers in Residence program so company gurus can be hands-on with startups, creating an institutional eco-system that is self-nourishing. In addition to access to the 28,770 Google employees for advice and acumen, start-ups get office space (and ping-pong tables) at Googleplex. 

While detractors question the wisdom of applying algorithmic metrics to new markets, Google’s recipe combines art and science.

“Investing is being in a dark room and trying to find the way out. If you have a match, you should light it,” Bill Maris, managing partner of Google Ventures, said in a lengthy profile by the New York Times.

“I’ve had conversations with Larry [Page] when he says, ‘Do as much as you can, as fast as you can in as big and disruptive a way as possible,’ ” added Maris. 

Google Ventures is particularly excited about bio and clean technology, and will fund smaller amounts in up to 100 new companies this year. Employees are incentivized with a $10,000 offer to uncover new investment opportunities that pay off.

The VC group's wide-ranging investments so far include Corduro, a mobile payments startup; gaming companies Kabam and Scvngr, clean fuels company CoolPlanetBioFuels, and Adimab, a yeast-based antibody discovery platform. 

In the first three months of 2011, corporate venture funds invested $583 million in start-ups according to the National Venture Capital Association, up $443 million in the same period last year and $245 million in 2009, as reported in the NYT.

“Like Google, we’re constantly evolving,” commented Maris to the Wall Street Journal. “We’re really putting the pedal down now…We don’t talk too much about capital. This is a creative and experimental foray for us.”  

It's a luxury Google has earned — and is happy to share.

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