Chances are high you have heard of Google. You are probably a contributor to one of those 3.5 billion search queries that the site processes every day. But unless you’re a venture capitalist, an entrepreneur or a somewhat obsessive tech journalist, you may not know the Google — or, more correctly, Alphabet, the corporate newcomer into the search and online ad giant — is also in the business of investing in startups. And, like the majority of the things Google does, Alphabet invests at scale.
Today we’re planning to undertake, if you’ll forgive the pun, a search of Google’s venture branches, its portfolio’s performance and what the company’s investment activity may say about its plans moving forward.
Alphabet was the most busy corporate investor in 2017
Taken together, Alphabet is among the most prolific corporate investors in startups. In 2017, Crunchbase data indicates that Alphabet’s three primary investment arms — GV (previously known as Google Ventures), CapitalG and Gradient Ventures — and Google itself spent in 103 deals.
(Crunchbase News contacted Alphabet with this particular story but didn’t listen in time for book)
Beneath, you’ll find a chart comparing Alphabet’s investment activity to other important investors, based on deals recorded in data.
For years, Intel and its venture arm Intel Capital topped the rankings of most busy corporate venture investors. But for 2017, Crunchbase data suggests that Alphabet’s venture capital unseat the processor maker. Together with 72 deals struck, Tencent Holdings and its venture franchisees rank second and SoftBank, which has a $100 billion pool of capital to slosh around, comes in third with 64 deals declared in 2017.
The Alphabet investing world
Alphabet has a somewhat unusual set up for a corporate investor, as we alluded to earlier. Statistics shows that Alphabet makes the majority of its equity holdings out of four entities:
- GV, previously known as Google Ventures, is Alphabet’s most successful venture fund.
- Growth equity fund CapitalG invests chiefly in late-stage deals.
- Gradient Ventures, Google’s newest fund, is focused on artificial intelligence deals.
- Ultimately, Google itself, has made a number of corporate venture investments.
Alphabet and its funds upped their pace of investing also, as the chart below shows:
In Alphabet 2017’s equity investment deal quantity topped historic highs from 2014.
Along with these equity investment operations, Google functions the Launchpad Accelerator, which grants $50,000 equity-free into startups in Africa, Asia, South America and Eastern Europe. The business also issues grants and manufactures impact-oriented investments from an entity called Google.org.
Taken collectively, here is exactly what the Alphabet investment world looks like:
The network visualization over reveals that the relations between Alphabet’s investing classes and their respective portfolios. 1 This picture depicts 676 relations between six Google investing classes (classified above in yellow), 570 portfolio organizations and 75 businesses that obtained Alphabet-backed portfolio businesses.
And, for the most part, there isn’t as one may expect overlap. CapitalG and GV only share two portfolio firms. GV spent in the seed round of Gusto, both the payroll and HR software platform, and both GV and CapitalG spent in Gusto’s Series B round. GV and CapitalG also spent in Pindrop’s Series C round, even though CapitalG directed that round. Aside from those two businesses Crunchbase data doesn’t indicate any other portfolio overlap between CapitalG and GV.
GV and Google also share some portfolio businesses. Google led INVIDI Technologies’ Series D round, where GV was a mere player. Google also led that the Series A round of popular consumer genetics firm 23andMe. Google followed in that the Series B round, where Google co-founder Sergey Brin was also an investor. GV didn’t invest in 23andMe till its Series C. GV continued its investment all how via 23andMe’s Series E. Google and GV are also investors in Ripcord, an early-stage firm building robots that scan and digitize paper documents.
When there isn & rsquo; t much overlap between Alphabet & rsquo; s their investing activity and funds, where is it then? The answer, it appears, may be in the exit information.
A vast assortment of businesses have obtained startups where one or more of Alphabet’s capital deployment arms spent. Crunchbase data shows that 81 entities have obtained 100 businesses where Google spent. Of those, it sounds as the chart below shows like Alphabet is its best customer:
Overall, Alphabet has obtained seven companies where it had previously invested. Google itself obtained six companies it formerly invested in, and also its X unit (previously known as Google X) obtained Makani Power, a firm that developed airborne wind turbines, where Google had directly invested. Other frequent trading partners with Google are Cisco, which has gained six Google-backed businesses, and Yahoo (today, collectively with AOL, part of Verizon-controlled Oath) with five acquisitions.
As an aside, Google spent in both SolarCity and Tesla, two firms with ties to Elon Musk. In 2011, Google spent $280 million in SolarCity, a firm founded by two cousins of Musk. Google and its co-founders Larry Page and Sergey Brin spent in Tesla’s Series C round alongside Musk, Tesla’s co-founder. Tesla went people in 2010 and completed its acquisition of SolarCity, a2.6 billion all-stock deal, in 2016.
And as the system visualization over reveals, Tesla isn’t the Alphabet portfolio company to go public. Alphabet funds struck venture deals with 11 other companies that have since gone public, such as Baidu, HubSpot, Cloudera, Spero Therapeutics, Lending Club and Zynga.
Deals spanning A to Z
If one had to describe capital&rsquorecord of venture deals it would beldquo. ” Unlike company venture portfolios, there doesn’t seem to be a cohesive theme to Alphabet’s out investments. The AI-focus of Gradient Ventures aside, Alphabet is equally as prone to invest in a homeowners insurance firm like Lemonade or even a customer care platform such as UJET (which Crunchbase Newscovered recently) as it is to invest in non-dairy milk manufacturer Ripple Foods or even African technician recruiting system Andela.
The diversity of Alphabet’s venture branches echoes the varied assortment of businesses, initiatives and long-shot stakes under its corporate umbrella. And enjoy it’s difficult to forecast what kind of job Alphabet will start next, it would appear that no amount of sifting and searching can declare what its venture arms will embrace next.
- The system visualization was created using Gephi, an open-source program package used for creating network visualizations, and the ForceAtlas2 layout algorithm.
Read more: https://techcrunch.com