The top 25: David Krane, GV and David Lawee, CapitalG
The development of conglomerate Alphabet’s corporate venturing units, GV and CapitalG, has been a closely-watched story over the past year after, in early August, Bill Maris stepped down after seven years as head of the subsidiary formerly known as Google Ventures.
David Krane took over as managing partner and CEO and has retained consistency with the Maris era in the first half a dozen investments made since the transition. This is perhaps to be expected, as Krane had been a general partner at GV since 2010 before stepping up as managing partner in 2014. The two largest rounds of those featuring GV since 10 August have been in healthcare.
Cancer-focused biotech company Carrick Therapeutics emerged from stealth with $95m in funding after licensing one of its three drug candidates from Cambridge University, and hopes to secure more academic research in future to enhance its portfolio.
GV led a $70m round in August for US-based immuno-oncology startup Arcus Biosciences that included Taiho Ventures, the corporate venturing subsidiary of Taiho, as well as Invus, Droia Oncology Ventures and Stanford University.
Additionally, the unit led a $32m funding round for US-based palliative care provider Aspire Health, which was also backed by Blue Cross and Blue Shield Association.
GV has been increasingly active in life sciences and health technology since 2014, with the sector making up 31% of its investments in 2015. Some of the most notable deals in terms of total round size were led by Krane, including investments in ride-hailing service Uber, smart thermostat maker Nest and crowdfunding platform CircleUp. Since he took over, GV has continued its interest in these areas.
GV led a $14m series A round for art-buying platform Twyla, which has just come out of stealth, joined the $20m B round for last-minute ticketing app Gametime, and contributed to the $47.5m equity round closed by online lending platform developer LendUp.
Most of the Maris-era deals were mid or late-stage rounds beyond series B, though it started in 2009 with a heavy investment pace by volume in seed and early-stage deals. Maris, who has reportedly since been raising new a fund, co-founded Google Ventures in 2009 with an initial budget of $100m a year which was soon increased. GV currently invests about $500m a year and had some $2.4bn under management as of December 2015.
GV was not mentioned in the recent post-Maris rounds for Cosy and EventBoard, having fetaured in both their seed rounds. Other portfolio companies, including cybersecurity software developers Pindrop Security, Anomali and Shape Security, and 3D printing technology developer Carbon have added to rounds in which GV had invested in the past year or so.
Its most recent deals this past month include leading Soylent’s $50m series B round, which will support the food substitute’s entry into brick-and-mortar stores, GV leading a $50m round for US-based stem cell transplantation technology developer Magenta Therapeutics, and backing geospatial software technology provider Orbital Insight’s $50m series C.
Krane is, however, celebrating an exit. Having previously acquired GV portfolio company Nest, Alphabet acquired Urban Engines for an undisclosed amount.
While GV has maintained its activity since the formal handover to Krane, other parts of Alphabet have retained their interest in private companies.
Google itself, now operating as Alphabet’s largest subsidiary, is also reportedly funding startups formed by ex-team members, including social network Hello, independently to Alphabet’s GV and its CapitalG activities.
In 2012 it emerged David Lawee had taken charge of late-stage venture unit CapitalG (formerly Google Capital). His unit’s general remit covers later-stage private technology companies where Google has no expected interest in acquiring the company but can offer help beyond cash. Lawee was previously head of corporate development and had run Google’s mergers and acquisitions group since 2008. He is an observer on two of CapitalG’s portfolio companies, Lending Club and SurveyMonkey, while CapitalG’s latest deals include leading US-based data analytics platform Looker’s $81.5m series D round and India-based mathematics education provider Cuemath’s $15m B round..
CapitalG pairs its companies with advisers spread across Alphabet, and in a six-month period has tapped 300 people to give advice to its companies, according to one of its partners, GCV Rising Star 2017 Laela Sturdy, who spoke to newswire Bloomberg at the time of her Care.com deal.
Robert Hohman, CEO of Glassdoor, said in the September 2015 issue of Fortune magazine that Sturdy had schooled Glassdoor on Google’s rule for international growth, which states that every new feature should be shipped in as many languages as possible, even if it slows the pace of new releases. He said: “It is extremely convenient when you are facing a hard problem to be able to ask the question: I wonder what Google did on this?”
Similarly, when Gusto planned to review its entire payments system, which processes about $20bn a year, CapitalG asked the engineer who built the software architecture for all payments across Google to help.
Edward Kim, chief technology officer at Gusto, told news provider Recode in December 2015: “CapitalG really has carte blanche within Google to find that one person and have that one person solve our problems. They actually bring a lot more to the table than money.”
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