Google has offered the surest sign yet that Europe and its IT sector are starting to shrug off the recession. The sign comes in the shape of a new venture capital fund that will “invest in the best ideas from the best European entrepreneurs.”
The news was confirmed this morning in a blog post by Bill Maris, managing partner with Google Ventures, who wrote that Google is looking for a new generation of European entrepreneurs to invest in.
While the initial $ 100 million seems a tad small compared with some of the other IT venture funds that are currently turning over stones in Europe, there should be a lot more money from Google if everything works out.
When Google Ventures set up in the US, its initial capital was $50 million a year. Over the years, that has risen to more than $300 million.Google has the cash for this kind of gamble and is willing to spend it as the recent acquisition of Nest for $3.2 billion and the purchase of Dropcam for $555 million show.
Maris offered a fairly clear picture of how Google perceives its role in Europe, noting: "Wander through the excellent Science Museum in London, and you’ll see inventions that transformed history. Like Puffing Billy, one of the world’s first steam locomotives, or Charles Babbage’s difference engine — a Victorian predecessor to the modern computer — or penicillin, the wonder drug that revolutionized the treatment of disease. These marvels from the past still influence our lives today, and are tangible examples of how fearless exploration and entrepreneurship can literally change the world."
To emulate these technology breakthroughs of yesteryear, Maris confirmed that Google is investing not in companies or even Europe, but “in the best ideas from the best European entrepreneurs." It wants to "help them bring those ideas to life.”
He added: “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.”
The fund will be based in London and will have four general partners. The Financial Times has identified them as: Eze Vidra, who set up Google’s campus in London, Tom Hulme, a serial entrepreneur, Peter Read, a British angel investor and adviser to technology companies, and Avid Larizadeh, the head of the UK arm of code.org.
They will report to Maris, who added that the fund is still evaluating what kind of companies it will be investing in. It is also evaluating how far down the road those companies should be in terms of development and the optimal size. The only thing of which he is adamant is that at least some of the future technology innovations will come form Europe.
We can’t predict the kinds of inventions the Science Museum might showcase 10 plus years from now, but we do know European startups will be essential to this future, and we can’t wait to see what they create.”
For Europe tech companies, this is an unexpected piece of news that will be more than welcome and comes not a minute too soon. Over the past six years, tech start-ups in Europe have more often than not forced to go looking for funding in the US to survive.