Google makes a fair packet through selling adverts alongside its search results, but the Mountain View tech giant is increasingly looking to turn a profit through other means, be it through new products such as Nest and Chromecast, or new businesses that it invests in through Google Ventures. See also: Google Ventures backs Resolution Games in Stockholm.
Google Ventures provides seed, venture and growth stage funding to companies that it thinks will grow into successful businesses, possibly even gaining the coveted "unicorn" status that startups get today when their valuation surpasses $1 billion.
The Google Ventures fund was set up in Silicon Valley in 2009 with a $100 million pot but in 2012, Google said it was going to provide the Google Ventures team with $300 million annually. Today it has $1.5 billion in assets. Some of that money has been used to back fast-growing US companies like Uber and DocuSign.
Google Ventures: capitalising on European startups
Last year Google decided it wanted to capitalise on European startups and it set up a new $125 million fund called Google Ventures Europe, which is based out of London and managed by four partners: Eze Vidra, Tom Hulme, Avid Larizadeh Duggan and MG Siegler.
Peter Read - an angel investor behind the likes of LoveFilm, Citymapper and Skype - was on the team when it launched but he left the operation in July, without providing a reason for his departure.
The Google Ventures fund was slow to get going but a flurry of deals have come in lately, including investments in European publishing company Kobalt, ecommerce firm Yieldify, children's book startup Lost My Name and luxury travel platform Secret Escapes. It has also contributed to an Oxford University investment fund.
Here Techworld talks to Eze Vidra to find out what makes him tick and how he's going about spending Google's money.
When did you first get into investing and why?
I've been fascinated with the funding aspects of startups since 2003, after my own experience trying to raise capital from VCs for a startup. Shortly after that, I started blogging about startups and venture capital on my blog, VC Cafe. Before becoming a General Partner at Google Ventures I was the head of Campus London and Google for Entrepreneurs in Europe.
What do you enjoy most about your job?
Working with talented entrepreneurs on things that matter. I get to meet incredibly smart, motivated people that want to drive change in their industries and ultimately make the world a better place. It's a big mission, which inspires me and motivates me to constantly be learning.
How would you describe your first year or so at Google Ventures Europe?
I'm very excited about the investments we’ve announced so far, including Kobalt, Lost My Name, Yieldify, Oxford Sciences Innovation, Secret Escapes and Resolution Games. And we're just getting started!
There were rumours that there had been some arguments between some of the partners. What do you say to these reports?
I don’t pay attention to rumours. The boring truth is that we’re a close team, both in Europe and the US, and we really enjoy working together every day.
How is the incorporation of Alphabet Inc likely to impact Google Ventures and your job specifically?
As Bill Maris mentioned in his post, it's business as usual for us.
Are you concerned that the partners at Google Ventures could one day be replaced by an algorithm?
Not at all. Technology can be very helpful, like in other industries, but ultimately venture capital is a people business.
Who do you see as your biggest rival in the VC world?
I wouldn't say I see any fund as a 'rival'. We all compete on deals in the industry, but the level of collaboration between funds is remarkable. Sooner or later you end up working side by side.
What do you think will be different for the UK tech sector in the autumn/winter of 2015 compared to 2014?
In the last few years, we've seen tremendous growth and momentum for the UK startup ecosystem. The talent, capital and ambition are finally starting to reach the 'density of network' that, until now, felt like it only existed in some parts of the US. The evidence is out there - more and more capital flowing to UK startups, in the form of new local funds as well as US funds investing in the UK. This trend has accelerated since 2014.
Which areas of technology are you particularly keen to invest in at the moment?
I'm interested in companies that are looking to disrupt traditional industries, through technology. They don't have to be in a specific area that could be sexy at the moment, but they need to have global ambitions, and demonstrate that their product is getting adopted by the market. That said, I'm very interested in the cybersecurity space, machine learning and enterprise tech.
How are your portfolio companies doing and how long could it be before they start making a return on your investment?
We're obviously very excited about their traction and prospects. For example, Kobalt, which is revolutionising the music industry by getting music artists paid transparently, recently launched AMRA, a collection society focused on digital rights collection. They are breaking new ground. Lost My Name, which is reinventing personalised content for kids, was the bestselling picture book in the UK in 2014.
What do you do to relax and unwind?
When I can catch a break, I love reading, listening to Pat Metheney and meditating. I also like long distance cycling, when I get a chance to do it. Four years ago I founded Techbikers, a non-profit organisation bringing together the tech community around cycling challenges to raise money for Room to Read. The next Paris to London ride is taking place next month and I can't wait. Please support us! All that said, I was blessed with a baby daughter a couple of weeks ago, so my time to relax and unwind is very limited at the moment. Watching an episode of my favorite series on Netflix is what I am doing to relax at the moment.
How would your friends describe you?
Probably they'd say that I'm energetic (read: A.D.D), silly (read: inappropriate) and curious. But most importantly, hopefully they describe me as a good friend...
Are there any companies that you regret not investing in?
No major regrets so far.
Where do you think you’ll be in 10 years from now?
How does the saying go? "Ask me to predict anything but the future". Hopefully, 10 years from now, I'm still on this planet, have a loving and healthy family, and still feeling as excited to get to work as I do today!
What do you make of the term “unicorn”?
I'm not a big fan of jargon, but as a term "unicorn" was a helpful addition to our lexicon. Of course not all startups can or should be unicorns. Maybe we should coin our own term for a fast growing startup that's not yet worth a billion dollars... how about Mustang?
Eze can be found Tweeting @ediggs.
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