Google Ventures has said that is launching a fund to invest in European startups. The fund is initially set at $100 million. The fund management team will be based in London.
The move into Europe comes five years after Google Ventures started investing in the United States and is part of a wave of money coming towards Europe and appears a move to try and play catch up lest the Internet giant miss out on some European stars of the future.
"We believe Europe’s startup scene has enormous potential. We’ve seen compelling new companies emerge from places like London, Paris, Berlin, the Nordic region and beyond – SoundCloud, Spotify, Supercell and many others," said Bill Maris, managing partner of Google Ventures in an online article.
It is likely that much of Google's European investment will be aimed at software and online transaction companies. Since Google Ventures started in 2009 it has built up a portfolio of more than 250 companies working across a large number of industrial sectors.
The $100 million some seems relatively modest when compared with a €400 million (about $540 million) fund launched by Index Ventures and a $475 million fund for Europe launched by Accel Partners in 2013. The $100 million fund still looks small and especially if it is expected to last several years.
However, some startups may be attracted to the prestige of the Google name and its apparent willingness to pay generously when it acquires startups. At the beginning of 2014 Google paid $3.2 billion in cash for a thermostat startup called Nest Labs Inc. (Palo Alto, Calif.). The basic idea behind Nest Labs was to add Wi-Fi Internet connections and software for remote control to heating, ventilation and air-conditioning products.
While that may seem rather obvious, the company was founded by executives with pedigree, Tony Fadell, and MattRogers, having previously worked at Apple on the iPod with its iconic circular touch wheel control interface.
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