Alphabet, the parent company of Google, has its fingers in a lot of pies. Subsidiaries include self-driving car company Waymo, research and development lab ‘X’ and smart home firm Nest.
One that receives less attention is GV, formerly called Google Ventures, its venture capital investment arm founded in 2009. GV has backed about 350 companies and has £1.9 billion in funds.
“Our investments range from $100,000 to $300 million dollars,” GV general partner Tom Hulme told Techworld during an interview at Web Summit in Lisbon last week.
There are 20 investors on the team, which spans the US and Europe.
“We are given a very free rein. Our job is to get a financial return; these are not strategic for Google so it’s all about good economic investments. However we also choose stuff that we think will make the world a better place,” Hulme says.
Fintech, life sciences and developer tools are three areas GV has invested heavily in. Investments include the company Blockchain , which provides a cryptocurrency wallet, and Lemonade.com, which provides insurance for renters in the US.
GV has also invested in Cambridge Epigenetix, a company which helps people to understand their epigenome (the chemistry which controls if specific genomes are expressed or switched off).
Hulme believes genomics, personalised medicine and AI represent the most exciting, up-and-coming areas within technology.
“Genomics will help unlock personalised medicine, increase not necessarily lifespan but ‘healthspan’ – and potentially cure rare diseases,” he says.
When asked to identify the most ‘over-hyped area’ within tech, Hulme suggests Initial Coin Offerings, a form of crowdfunding using new cryptocurrencies.
“As with most things that are over-hyped, in truth there is some substance at the heart of it. If you look at the amount of capital that has gone into ICOs, it’s hard to believe there isn’t something in there. There are some phenomenally interesting ICOs, it’s a nascent market so everyone is rushing in. That’s how stuff happens: creative disruption,” he says.
There is no magic formula to the companies GV chooses to invest in, but you do develop some ‘pattern recognition’, Hulme says.
There are a number of traits that he looks for in founders, including resilience, curiosity, flexibility, enthusiasm, good communication skills, visionary traits and empathy.
“Empathy for your customer is a leading indicator of success. I would hope any business I invest in would keep their customers happy. When entrepreneurs lose interest in customers, it’s a bad sign,” he adds.
Hulme receives 10-20 pitches from startups every day and splits his time between networking and meeting companies he’s considering investing in, doing due diligence on those investments, and supporting companies within his portfolio.
“I split my time probably a quarter, a quarter and a half between those three at the moment,” he says.