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Google invests in incubator The Factory

Google is the latest to jump on board with new Berlin tech hub The Factory. The company has pledged €1 million ($1.27M) over three years through its “Google for Entrepreneurs” program.

The yet-to-be-completed Factory is a 12,000 square meter property development in central Berlin, which aims to bring established companies and new startups together in a unique (to Berlin) work-play environment. Confirmed tenants include Berliners SoundCloud, 6Wunderkinder, Versus IO and Toast, as well as global web non-profit Mozilla.

The funds Google has pledged will be allocated through The Factory and are earmarked for training, mentoring, events, and other programs to support startup development.

The Factory is backed by JMES Investments, an investor in several Berlin startups, in partnership with s+p Real Estate.

“Compared to London, we’ll still in kindergarten in Berlin.”

In terms of contacts, reputation, and funds, Google’s support is a significant boost in The Factory’s bid to help local startups grow to compete internationally. “Compared to London, we’ll still in kindergarten in Berlin,” JMES partner Simon Schafer said today, pointing to the tendency for Berlin Internet companies to exit at lower valuations to those in London. “We’re just at the beginning of the innovation process.”

He added that Berlin companies are also less likely to be in it for the money than some of their international peers.

For Google, the deal is more about goodwill than a direct bid to capitalize on talent in Berlin. The Factory will be enforcing a “no recruitment” policy on campus, and Google will not be directly investing in startups supported by its funds.

While Google’s pledge to The Factory is far behind its commitment to Google Campus in London, it’s a sign of growing interest in Berlin. Other recent Google initiatives for German startups include Grunder Garage in partnership with Indiegogo.

Additional reporting by Michelle Kuepper.

A version of this story appeared today on VentureVillage, VentureBeat’s Europe-based syndication partner.

This story originally appeared on VentureVillage. Copyright 2012

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