The new investment arm of Google Inc. will have 300 million dollars in fresh capital at its disposal this year. The give-and-take process is going to be started with entry of Google Inc. into Web education.
David Lawee, who currently manages Google Capital, announced that the unit, which was established by the company to support late-stage technology startups, will be provided with twice as much funds as it had in 2013. About 40 million dollars are being invested by Google Capital in Renaissance Learning Inc., which is an education software company. Mr. Lawee also revealed that the unit has a target of five to six deals by the end of 2014.
Google Inc. started early-stage investing with the creation of Google Ventures. As reported by Bloomberg, the group, whose official début was today after signing two deals last year, announced that it projects to almost double its staff from 8 to 15 in the next year.
David Lawee revealed that the goal of Google Capital is to threefold its money from each investment in five to seven years. Renaissance Learning, which is currently used by almost 20 million students and teachers in more than 60 countries, is also expected to provide such type of return.
Mr. Lawee explained in an interview, which was cited by Bloomberg: “Google Ventures kind of invests across the spectrum but predominantly invests in early-stage companies, and they have an organization that’s super well configured for that. Google Capital is only investing in late-stage investments, and we’re building an organization completely configured around that.”
Mr. Lawee also explained that Google Capital will avoid funding companies that may compete with Google, contrary to Google Ventures. The latter is known for having made investments in TuneIn Inc., which is an online music service and in RetailMeNot Inc., a Web couponer. Nest Labs Inc., which was bought by Google earlier in 2014 in a 3.2-billion-dollar deal, had also been supported by Google Ventures.
David Lawee said: “Nothing matters if we don’t make returns. Building a successful investment firm that leverages the insights of Google and all these things we are talking about — that’s like a 20-year vision”
Google Inc.s shares rose by 0.67% on Tuesday to settle the session at $1 210.88, marking a one-year change of +52.72%. According to CNN Money, the 41 analysts offering 12-month price forecasts for Google Inc. have a median target of $1,313.00, with a high estimate of $1,500.00 and a low estimate of $1,025.00. The median estimate represents a +8.43% increase from the last close.
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