Google Inc (NASDAQ:GOOG) will reportedly increase the fund it allocates to its venture-capital wing to as much as $300 million per year from the initial figure of $200 million. This has tossed Google Ventures into the top stratum of commercial venture-capital funds.
This particular move implies that Google will now be able to invest in more later-stage financial rounds that translate into tens of millions of dollars for each investor.
It places the company on the same footing as more conventional corporate venture funds like Intel’s Intel Capital that usually $300-$500 million for each year.
How Should Investors Trade GOOG After The recent retreat? Find Out Here
Part of the underlying principle behind the increase is that Google Ventures is a comparatively new company that was founded in 2009. Some of the companies that it has supported 2-3 years back are now in dire need of cash.
Google Ventures has decided to pursue a diverse approach by deciding to invest in a board gamut of companies ranging from medicine to clean power to coupon companies.
Each year, it usually finances 40-50 seed-stage contracts where it puts in $250,000 or less in a company and probably around 15 agreements where it puts in as much as $10 million. Google is aiming at completing one or two deals each year in the range of $20-$50 million.
Some of the investments that Google has decided upon include a smart-thermostat company, Nest, a smart-grid company, Silver Spring Networks, a car-sharing service provider, Relay Rides and Foundation Medicine, a company that implements genomic analysis to cancer treatment.
However, Google Venture lacks top-notch companies like Twitter and Pinterest. The company’s latest hiring of high-profile entrepreneur Kevin Rose could aid in attracting higher-profile contracts.
It seems that it would not take much time before there comes more cash to play with.