Google to create European venture capital arm 

Google is creating a European arm to its venture capital vehicle, as the internet group seeks to tap into the ideas and money being generated by the continent’s emerging start ups.

Google Ventures, which has previously focused its investments on Silicon Valley groups including such as Uber and Nest, is launching a $100m fund dedicated to fledgling European businesses.

The move stems from Google’s belief that the region will become home to some of the world’s biggest technology companies. It will give further credence to the idea that Europe can sustain technology hubs in places such as London, Berlin, Stockholm and Israel.

“As we look out around the world, we realise that the tech ecosystems are getting bigger and stronger,” said David Drummond, Google’s senior vice-president of corporate development.
“Nowhere is this more true than in Europe. Every European capital I travel to I see these start up clusters. Its obvious that great companies will come out of these ecosystems.”

The new unit will have five general partners. They include Eze Vidra, a longstanding executive who set up Google’s “Campus” in London, a workspace for budding tech entrepreneurs; Tom Hulme, a serial entrepreneur; Peter Read, a British angel investor and adviser to technology companies; Avid Larizadeh, the head of the UK arm of code.org and the co-founder of Bottica.com; and MG Siegler, the American tech blogger turned venture capitalist.
They will work from offices in Clerkenwell in London, near the so-called Silicon Roundabout area that is home to hundreds of fledgling tech groups. The new fund’s investments will be made throughout Europe, however.

This team will report to Bill Maris, the head of Google Ventures. He said it was not clear the size, number or type of investments the fund will make in the region. “If you look at the US, we invest at all stages and in all sectors,” said Mr Maris. “It’s not about how many investments we do, but the impact those companies have.”

The new fund is smaller than some of those dedicated to the continent’s start-up scene. In June, Index Ventures launched a €400m fund dedicated to early-stage technology companies in Europe. In 2013, the London offices of Accel Partners unveiled a similar fund worth $475m. Google Ventures said the initial investment of $100m could rise over time depending on its success.

Start ups could be attracted at the opportunity to establish ties with Google, as it may pave the way to a lucrative acquisition by the internet giant. In January, Google acquired Nest, the maker of smart thermostats and smoke alarms, for $3.2bn. Google Ventures had previously invested in the company in 2011.

The company insisted its investments are not “strategic”, however, saying its only goal was to achieve financial returns. It pointed out that some of its portfolio companies had also been sold to rivals such as Facebook and Yahoo.

 

Source: ft

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