Google to boost it venture capital arm with more funds

Google is looking to boost up its venture-capital division with an additional US$ 100 million, to US$300 million, expected to enable it to invest into later-stage startups globally.

Barely four years since launching Google Ventures, the Internet giant has been investing close to US$200 million annually in different sectors, and some of its earliest startups which it invested in back in 2009, are at a stage that requires more funding.

“It puts a lot more wood behind the arrow if we need it,”said Bill Maris, managing partner of Google Ventures.

With this announcement, Google is now in the same league as Intel’s Intel Capital, which on average invests $300 million to $500 million a year.

Research has shown that follow-on or later-stage funding usually runs into millions of dollars for startups to scale their businesses, and Google may be shifting gears to accommodate this need that is bound to arise with time.

“Every year, Google Ventures typically funds 40 to 50 “seed-stage” deals where it invests $250 000 or less in a company, and perhaps around 15 deals where it invests up to $10 million,” Maris added.

Maris said that Google Venture’s aim is to complete one or two deals annually in the $20 million to $50 million range.

Just recently, Google Ventures hired Kevin Rose, a high-profile entrepreneur, hoping to enable it attract higher-profile deals, that have been lacking in its portfolio.

This could be good news, especially for early African startups that are now seeking for later-stage funding. This was evident at the recent DEMO Africa conference that was help in Nairobi.

Most of the startups present had already received some first-round of funding, and were now in the ‘upscaling’ stage, that requires a considerable amount of money.

Posted in: Startups

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