Google has committed money to two Indian venture capital firms, saying fledgling companies in India with good ideas have too few avenues for financial support.
Google invested undisclosed amounts into small venture firms Seedfund and Erasmic. The amounts were likely in the single digit millions.
This continues Google’s experiment with different forms of corporate development. The move is significant because the rap on corporate investors is that they’re unreliable — enthusiastically supporting companies when times are good, but then withdrawing when their stock price is down and shareholders demand renewed focus on core business. Last year, Google began investing directly into start-ups, including WiFI router company FON, and another WiFi router company Meraki. Overall, these investments have been very small, relative to the hundreds of millions invested by other large companies, such as Intel.
Red Herring first wrote about the Google VC move a couple of weeks ago, and Samir Sood, Google’s head of corporate development in South Asia has since sent out a statement, explaining the move: “While the rush of large amounts of venture capital into India is well-documented, very little of this trickles down to the really small firms, the early-stage start-ups.”
Silicon Valley firms Sierra Ventures and Mayfield reported investments into India’s Seedfund (see here and here). Mayfield said Seedfund’s fund will be $15 million in total. Other Seedfund backers are Motorola Ventures, Reliance ADA Group, SVB Financial Group, an affiliate of Silicon Valley Bank, reports VentureWire.
Tags: co:google, inv:Erasmic, inv:Seedfund, people:Samir-Sood8 Comments
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Alex Grogan said:
Fledgling companies in the MidWest, USA have too few avenues for financial support.
Let’s keep it real, it means less taxes to pay.
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Matt Marshall said:
You think? Not likely, with such small dollar amounts. Unless they’ve created some special tax-evading vehicle to do this. But haven’t seen any evidence of that.
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Alex Grogan said:
Perhaps Matt, I guess my point was more along the lines of my first sentence.
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Erick said:
India carries more PR brownie points, I suppose. Midwest is not sexy enough.
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Jeff N said:
I’m not so terribly sure about positive PR points from US sources when it comes to spending money overseas instead of in the Google’s own back yard.
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Kris Nair said:
Seed funds and VC firms are pretty new in india and start-ups were rising money in treditional way of fund rising. Hope this move will contribute some more action to the innovation front in the region.
PR? Well - What we got here is failure to communicate :-)
Indian VC investments are the ‘in-thing’ or ‘trend’ in vc now! -
edward said:
Investing in India is cheap but also has lot of problems.
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Bakul Parekh said:
Interested in funds for real estate developments in and around India,good opportunity and properties for devlopment
