Although a relatively new kid on the block, Google Ventures has quickly established itself as a prominent force in VC. With several big exits behind it and a host of hot private companies in their portfolio, we dig into what, where and with who Google Ventures is investing.

Bolstered by several high-profile financings and exits, Google Ventures has quickly established itself as one of the more high-profile names in venture capital today.

We dive into the firm as part of our teardown of Google Ventures.

Notes:

  1. Where’s the data & viz from? 100% of the visualizations and data you see in this teardown are directly from the CB Insights platform’s Investor Analytics tool.
  2. What’s a Teardown?  A product teardown is the act of disassembling a product to understand its parts, functionality, etc. An investor teardown is analogous. We’re trying to understand a firm and what makes it tick by analyzing data around their financing strategy, investment thesis, key people, exit history, investment syndicates and more.

We’ll discuss trends and highlights in Google Ventures portfolio over the past few years by analyzing the following dimensions:

Google Ventures sees huge spike in deal activity

Google Ventures has seen a huge spike in activity in recent years, experiencing 65% YoY deal growth between Q2 2013 – Q1 2014 versus Q2 2012 – Q1 2013. Its biggest quarters, in terms of both number of deals and total amount of funding, occurred within the last four quarters.

A few of Google Ventures’ recent notable deals include:

  • Cloudera’s $160 million Series F round (which ballooned to $900M after an investment by Intel) in March alongside T. Rowe Price and an affiliate of MSD Capital, the private investment firm of Dell founder Michael Dell.
  • Uber’s $1.2 billion Series D round of funding in June, the bulk of which came from mutual fund investors Fidelity Investments, BlackRock and Wellington Management. This is following their role in Uber’s $258 million Series C round last August; since then, Uber’s valuation has jumped from $3.5 billion to $18.2 billion.
  • Flatiron Health’s Series B round in May, in which the firm led the $130 million financing. This deal represents Google Ventures’ largest investment in a health IT startup to date.

If you’d like to see more, we’d earlier detailed Google Ventures’ top 10 biggest deals (which has since changed given Uber’s latest funding).

Below is a graph of Google Ventures’ monthly investment participation (deals & funding) over time from their profile on CB Insights.

Google Ventures financing activity 

A diverse array of exits

Google Ventures’ portfolio exits highlight the firm’s investment diversity. In terms of exit activity, Google Ventures has seen ten of its portfolio companies exit in the last year. This was 17% less than its exits in the four quarters prior.

The firm’s exits have been all over the map, in terms of both industry and size.

Recent Notable Exits:

  • Namo Media was acquired by Twitter in June for $50 million. The firm invested early, leading the native advertising startup’s $1.875 million seed funding round in March 2013.
  • Drug developer iPierian was acquired by Bristol-Myers Squibb in April for $175 million (with a potential $550M for earnouts). Google Ventures invested in the company’s Series B rounds in July and September of 2010, as well as its Series C round in September 2013.
  • Smart thermostat startup Nest Labs was acquired by Google for $3.2 billion in February. They participated in the company’s Series B round in May 2011 and Series C round in January 2013.

The firm’s exits are plotted on the below scatterplot taken from the Google Ventures profile.

Google Ventures exits    

Google Ventures’ partners

Here are a few of the big players in Google Ventures:

Bill Maris is Managing Partner at Google Ventures and is regarded as the founder of the corporate venture unit in 2009. His investments include Nest Labs, Uber, and 23andMe. He sits on the boards of Nest Labs and biotech company Adimab and has a particular interest in next generation life sciences and artificial intelligence, evidenced by his idea to create Calico, a biotech company focused on fighting human aging.

Below is a look at Maris’ recent press mentions, which saw a spike in the spring of 2013 due to his role in the Glass Collective, a program established with Andreessen Horowitz and Kleiner Perkins to fund startups with app ideas for Google Glass.

press maris

Joe Kraus, co-founder of Excite and JotSpot, is General Partner with investments in the likes of KabamTuneIn, and Pocket. He has also been an active angel investor in several companies, such as LinkedInAardvarkKongregate, and OpenCandy. Kraus is on the board of the Electronic Frontier Foundation, Clean Power Finance, and MyLikes.

Rich Miner, co-founder of Android, is a General Partner and leads Google Ventures’ East Coast investment team. His investments include MessageMe, Enterproid, CustomMade, and Hubspot. He sits on the boards for Crittercism, EnglishCentral, VigLink, and Recorded Future.

 

Industry Focus and Strategy

While Google Ventures has upped its involvement in the Internet Software & Services industry as a whole within the last few years, the firm has drastically decreased its investment in the Social space within the internet sector and increased it in more “enterprise-y” areas, as evidenced by its investments in Cloudera, DocuSign, and Hubspot. Their interest in the Business Intelligence, Analytics, and Performance space has remained strong, demonstrated by their support of companies such as ClearStory Data and Recorded Future, which they funded for three rounds and two rounds respectively.

The firm has also shifted away from the Social space on the Mobile Software & Services side and increased investment in the Video and Health & Wellness sectors, as evidenced by their fundings of Vungle, Jumpcam, and FitStar Labs.

The Industry Heatmap below shows the distribution of investments in the Internet Software & Services space by sub-industry, with 2010-2011 on the left and 2012-2013 on the right. The size of the box represents the number of deals and the darkness of the blue represents total funding.

GV industry comparison

Geographic Strategy – Increased Interest in Massachusetts

Although the majority of Google Ventures’ investments still take place in California near the mothership, the firm has recently increased its investments in Massachusetts. The firm participated in rounds totaling $87 million across 10 deals in Massachusetts between 2010 and 2012, and this has jumped to $212 million in 28 deals between 2012 and 2014. Some of their recent Boston-area deals include Adelphic, CustomMade, Hubspot, and LevelUp.

GV geo comparison

Stage Strategy

While all stages of investment have seen increases over the last five years, the biggest growth has been in the early rounds, with 64% of deals taking place in Seed or Series A rounds over the past five years.  Google Ventures is the most active corporate venture capital firm at the seed stage so this is not entirely surprising.

The table below gives details on the firm’s deals in each stage:

GV stage

New vs. Follow-On Investments

In recent quarters, Google Ventures has also been steadily increasing the proportion of follow-on investments in their portfolio, demonstrating a growing commitment to sticking with startups they’ve funded in the past.  This only makes sense as the firm’s investments mature and the best ones require follow-on investment funding. Google Ventures, as evidenced, by the stage breakdown above, can and does invest across the maturity spectrum.

The chart below from CBI’s Investor Analytics shows the proportion of Google Ventures’ new investments vs. follow-on investments in each quarter for the past five years.

GV new vs follow on

Deal Size

Google Ventures’ deal size as evidenced by their median deal size has largely held steady, but its recent participation in mega-financings (Cloudera, Uber) have served to drive up the average.  (The enormous spike in Q3 2009 is due to their $62 million funding of V-Vehicle.  The firm came into existence in March 2009 so the firm was more nascent then and thus, their investment pace wasn’t what it is today.)

Below is a graph from the Investor Analytics tab on CB Insights that shows trends in both Google Ventures’ average deal size and median deal size.

 

GV deal size

Investment Syndicate

Google Ventures often does deals with other big VC firms such as Kleiner Perkins (42 rounds across 28 companies), SV Angels (26 rounds across 22 companies), and Andreessen Horowitz (27 rounds across 22 companies). Several of Google Ventures’ top co-investors are also among its top dealflow sources, including Kleiner Perkins, First Round Capital, and SV Angel. Y Combinator is a top feeder of dealfow to Google Ventures.

If you’d like to read more about Google Ventures’ investment syndicate, check out our analysis here.

GV coinvestors

 

Notes:

  1. 100% of the visualizations in this Teardown are from Investor Analytics. No MS Excel necessary.
  2. Visualizations are all interactive so you can click and see underlying transaction details.
  3. Visit Google Venture’s profile to check out these visualizations on your own.
  4. Need an account? Sign up here.