When it launched, Google Ventures was lauded for its algorithmic approach to venture investing. The corporate venture arm has invested in many private companies valued at over a billion dollars – at the late-stage primarily.
So how has Google Ventures’ done at the seed stage? Has its algorithmic approach to investing proven fruitful. As context, an article from the NY Times revealed a bit of the firm’s data-driven approach:
To make its picks, the company has built computer algorithms using data from past venture investments and academic literature. For example, for individual companies, Google enters data about how long the founders worked on start-ups before raising money and whether the founders successfully started companies in the past.
It runs similar information about potential investments through the algorithms to get a red, yellow or green light.
Google says the algorithms have taught it valuable lessons, from obvious ones (entrepreneurs who have started successful companies are more likely to do it again) to less obvious ones (start-ups located far from the venture capitalist’s office are more likely to be successful, probably because the firm has to go out of its way to finance the start-up.)
We decided to analyze Google Ventures 100+ seed investments to understand:
- How Google Ventures seed follow-on rate compares to other smart money VCs
- Which of Google Ventures’ seed companies have raised the highest amount of follow-on funding
The data is below. For another analysis on Google Ventures, check out the Google Ventures teardown.
2/3rds of Google Ventures seed investments raise Series A or exit
To analyze Google Ventures’ seed follow-on rate, we looked at any seed investment it did between its inception in 2009 and September 2013 (to ensure the seed deals had enough time to mature). Based on the data, Google Ventures saw 67% of its seed investments in that period either go on to raise Series A funding or be acquired.
Among 16 other brand-name VCs including Sequoia Capital, NEA and Andreessen Horowitz, Google Ventures’ follow-on rate was was average.
Top Google Venture seed investments by follow-on
Among Google Ventures’ seed investments, we took a look at their top active seed investments by total follow-on raised. While Google Ventures counts all of its billion-dollar companies as late-stage investments, the firm does have several seed investments that have gone on to raise sizable follow-on funding.
A/B testing company Optimizely, has raised the highest amount, raising $85M in cumulative Series A and Series B funding. Other well-funded Google Ventures seed investments include Crittercism, Clever and Hired, which just raised a $15M Series B at a $200M valuation. Other Google Ventures-seeded companies recently valued at $100M include payroll software firm ZenPayroll and mobile game video recorder Kamcord.
Of note, the top 10 Google Ventures seed investments by follow-on funding have already raised over $346M in post seed-financing. In total, Google Ventures seed investments have raised over $560M in seed follow-on to date.
|Company||Post-Seed Funding ($M)||Select Follow-on Investors|
|Optimizely||85||Benchmark, Bain Capital Ventures, Andreessen Horowitz|
|Crittercism||47.5||InterWest Partners, Scale Venture Partners, VMWare, Accenture|
|Clever||40.3||Sequoia Capital, Lightspeed Venture Partners, GSV Capital|
|Hired||30||SoftTech VC, Sherpa Ventures, Comcast Ventures, Silicon Valley Bank|
|ClearStory Data||30||Kleiner Perkins Caufield & Byers, Andreessen Horowitz, Khosla Ventures, DAG Ventures|
|VigLink||26.5||Emergence Capital Partners, Foundry Group, Costanoa Venture Capital, RRE Ventures, Correlation Ventures|
|Kamcord||25.3||Tencent, GungHo Online, Wargaming, DeNA, TransLink Capital, XG Ventures|
|Vungle||23.5||Thomvest Ventures, AOL Ventures, Webb Investment Network, Crosslink Capital|
|ZenPayroll||20||Kleiner Perkins Caufield & Byers, General Catalyst Partners|
|Yesware||18.7||Battery Ventures, Foundry Group, IDG Ventures, Golden Venture Partners|
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