An Inside Look at Google Ventures

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Google owns stock through it's own investments

Here’s a look at some cool companies that Google Ventures has invested in.

As should be no surprise, Google Ventures takes an unconventional approach to the venture capitalism game. While a typical firm may focus on one industry or a certain part of a company’s lifecycle, GV has a much more expansive vision. It invests at all levels and a myriad of industries. Oh, and the portfolio covers more than 200 companies.

Google Ventures is not just about writing checks, either. It is more like a company factory.

“The team at Google Ventures is fantastic to work with,” said Vineet Jain, co-Founder & CEO of Egnyte. “Most Sand Hill VC firms will tell you that you are going to get more than just money, but no one epitomizes this better than Google Ventures. Starting from the top down, their leadership is outstanding. Karim Faris has been an integral part of our success and growth, serving a vital role on our board. Aside from just advising, Google also has an amazing roster of people with operational skills in design, marketing, HR, and more.”

Google Ventures has only one investor (called a “limited partner”), which of course is Google (GOOG). This means that portfolio companies have access to the company’s top-notch engineers and scientists.

So what are some of the cool companies that Google Ventures has invested in? Well, here’s a look:

Google Ventures Investment #5 — Blue Bottle

Funding: $45.7M

Not all of the portfolio companies of Google Ventures are pure tech plays. Consider Blue Bottle, a brick-and-mortar coffee shop chain.

Now it’s true that Blue Bottle is a popular hangout for hipsters, coders and tech founders in San Francisco. Some of the investors include Instagram’s Kevin Systrom, Twitter’s (TWTR) Ev Williams and Flickr’s Caterina Fake.

The interesting thing is that Blue Bottle is fairly old school. After all, there is no WiFi or even outlets at the shops! Instead, the focus in on creating truly outstanding coffee and even ice creams (I’ve been at Blue Bottle many times and have never been disappointed).

So far, the company is in the early stages, with only 13 locations. But hey, as Starbucks (SBUX) has shown, a coffee company can turn into an extremely valuable business.

Google Ventures Investment #4 — Egnyte

Total Funding: $62.5M

The storage business is far from easy, as seen with the IPO travails of Box. The fact is that mega companies, like Microsoft (MSFT) and Google, are getting aggressive in the space. But Egnyte has found a way to deal with the pressures, building a hybrid-cloud product. This means that customers can provision storage either via the cloud or on-premise so as to allow for better security and speed.

Egnyte has a roster of more than 40,000 customers, like Coach (COH), Bulova and Masco (MAS). The customer base includes more than 1 million users that share 1 billion files every day.

Google Ventures Investment #3 — NextDoor

Total Funding: $100.2M

NextDoor is a social network for neighborhoods. Some of the services include: notifications about break-ins, lists of babysitters, and alerts to help find lost pets. The company’s mission is to “bring back a sense of community to the neighborhood, one of the most important communities in each of our lives.”

But NextDoor has not been without controversy. Nirav Tolia, who is the CEO, was charged with a felony hit-and-run recently. But he plead to a misdemeanor and will spend 30 days in a country jail (although, he will probably instead serve a weekend program). After that, he will be on probation for two years.

Back to the business side of things, it looks like NextDoor ultimately wants a piece of the valuable local e-commerce space. Think of it turning into an Angie’s List (ANGI) or Yelp (YELP).

Google Ventures Investment #2 — One Medical Group

Funding: $117 Million

As a physician, Tom Lee has faced many problems in the U.S. healthcare system first-hand. So he did something about it. In 2007, he launched One Medical Group, which is a next-generation primary care operation. With mobile apps, patients can easily communicate with doctors, get access to their medical records and set up appointments. And, hey, while they’re waiting, patients can enjoy the modern décor.

A key part of One Medical Group’s strategy is low administrative overhead. This means there is more money to hire doctors. As a result, while a typical primary office doctor may see 25 to 30 patients each day, Medical One has reduced this to about 5 to 7. There are currently 27 locations and the annual fees range from $149 to $199. Medical One also has a thriving benefits program, with more than 60 organizations like Adobe (ADBE) and Uber.

Speaking of which…

Uber's legal battle the taxi industry

Source: ©iStock.com/Aleutie

 

Google Ventures Investment #1 — Uber

Funding: $1.5 Billion

Founded in 2009, Uber has been disrupting the taxi cab market. The company operates a mobile app that can easily locate a driver for consumers, and it also provides photos, background information and real-time maps. In terms of the revenue, Uber gets 20% of the cut from the fares.

When Google Ventures invested in Uber about a year ago, the funding round was for $258 million at a valuation of $3.5 billion. Well, since then, the company has continued its winning ways. Just a few weeks ago, Uber raised $1.2 billion at a valuation of $18 billion.

With the backing of Google Ventures, there has been lots of speculation of possible strategies. Perhaps the most notable is to use driverless cars. And, according to Uber CEO and co-founder Travis Kalanick, that’s “the way the world is going.” Although, he does think it will take a long time until his company starts using driverless cars.

Still, when it comes to major Google Ventures investments, few can top Uber.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


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