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Google Ventures Seeks to Grab a Share of Europe’s VC Market

Google Ventures, the venture capital arm of Google search engine, has now entered the European market. This comes after weeks of rumours and speculation. Making the big announcement, the partners, Peter Read, Eze Vidra, Avid Larizedah and Tom Hulme said that Google Ventures will start by investing up to $100 million in the continent.

The amount of investment is significant bearing in mind that this is the first time the firm is investing outside the United States. The subsidiary will have its headquarters in London. In a statement to the newsrooms, managing partner Bill Maris said that there is enormous potential in Europe’s start-up market. He made reference to the compelling new companies that have recently emerged from cities like Berlin, London, Paris, and many others in the Nordic countries.

Google ventures was founded in 2009 as the venture capital arm of Google and has experienced significant growth since then. Its main areas of focus are internet software, life science, artificial intelligence, healthcare, robotics, cyber security, transportation, agriculture and other areas that change industries and improve lives. Perhaps the focus on internet software and transportation was the motivating factor that saw Google ventures invest in the transport/technology start-up, Uber.

The success of Google ventures and its model is evident in the fact that the $100 million investment funds that the firm had in 2009 tripled to $300 million by 2012. The partners are keen to replicate the US model in Europe and all factors point to the firm’s success.

Data scientists have analysed the investment model of Google ventures and its potential impact in Europe. They concluded that:

  • The firm makes long-term investment in start-ups in their early stages
  • The firm’s initial investment per start-up is usually below $2.5 million
  • The firm co-invests with other venture capital firms

Going by this analysis, the European market should rejoice because more local venture capital firms will benefit from Google ventures’ experience as they partner with it. Further, the long-term investments will give an opportunity to start-ups that have long term goals. Such start-ups often find themselves with no VC to fund them as many VC firms focus on short-term investments.

Additionally, the entrance of Google Ventures is good news to the continent because:

  • It confirms that the ecosystem in Europe has matured to the level of having Google class companies in the continent. It is good enough to say that Europe no longer needs validation as its market is well advanced. Nevertheless, it is satisfying to see international companies express optimism that the continent will continue to play an important role in global investment.
  • According to Bill Maris, Google ventures has identified local angel investors and respected venture capitalists to partner with from the word go.
  • The firm successfully spearheaded innovation in the US venture capital ecosystem together with $1.5 Billion under management since its establishment in 2009.

It remains to be seen whether the Google ventures’ impact on European VC market will match the US one.

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