Google Ventures Looks to Invest Millions in Software, Green IT, Health Care
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Google is setting up Google Ventures, a venture capital fund with the capacity to invest in consumer Internet, software, clean-tech, bio-tech, health care, and whatever other areas that might harbor the "next big thing." Although Google claims its new fund is not an acquisition vehicle, the company has a history of purchasing startups such as YouTube and then integrating them into its core businesses.
Google announced the creation of Google Ventures on March 30, a venture capital fund designed to invest in startups across the technology spectrum. By doing so, Google joins Intel and other companies in establishing a venture-capital arm for investment in smaller firms with potential. Google already has a philanthropic arm, Google.org, that has focused on investments in global health and clean energy."We'll be focusing on early stage investments across a diverse range of industries, including consumer Internet, software, clean-tech, bio-tech, health care and, no doubt, other areas we haven't thought of yet," Rich Miner and Bill Maris, managing partners of Google Ventures, wrote on the official Google blog. "If anything, we think the current downturn is an ideal time to invest in nascent companies that have the chance to be the -next big thing,' and we'll be working hard to find them."
"The $100 million or so is not the type of funding they would need to go out and make acquisitions of major companies; it's basically seed money," Charles King, an analyst with Pund-IT Research, said in an interview. "I would expect them to proceed in much the same way as Intel Capital and IBM, in that they'll find interesting companies and throw them a financial lifeline in order to help them survive, and then have a seat at the table."
Google Venture's public stance against being an acquisition vehicle, King continued, "may be a matter of political expediency."
"There are any number of startups whose main reason for existing is to be acquired by a larger organization, but that's not always the case," he said. "So from a socio-political standpoint, it's better for Google to say they're heading out there simply to provide guidance. If eventual acquisition was an explicit goal, they might risk scaring off more companies than they would attract." Editor's Note: This article has been updated with comments from an analyst.
"There are any number of startups whose main reason for existing is to be acquired by a larger organization, but that's not always the case," he said. "So from a socio-political standpoint, it's better for Google to say they're heading out there simply to provide guidance. If eventual acquisition was an explicit goal, they might risk scaring off more companies than they would attract." Editor's Note: This article has been updated with comments from an analyst.
