Google vs Intel: in 2012 reviews

The corporate venturing units of US-based search engine Google and of US-based chip manufacturer Intel are the two most high profile corporate investors in start-ups – so it was fitting the two outfits launched their annual reviews within days of each other last week.

The pair of corporate venturing units outlined a 2012 that sees them converging in annual investment pace, although the long-established Intel Capital, which has invested more than $10bn in its history is understandably more active in realisation activity than Google Ventures, which was set up in 2009. However, with Google Ventures pointing to eight key exits early in its development, signs are emerging that its young portfolio is of a high quality.

Both firms had compelling stories to tell. The emergent Google Ventures has now funded more than 150 companies and grown to a team of more than 60 people, and now has a $300m mandate to invest annually, up from $200m. However, it did not disclose how much it has invested this year.

Intel Capital was more specific on investment activity in 2012, saying it had invested more than $300m in more than 50 companies and had completed more than 70 follow-on investments. This marked a slowing down in investment with Intel Capital providing $526m to investments in 2011 and striking 89 deals in 2011, to take its total to about 400, at that time, Intel Capital’s president Arvind Sodhani said in February this year.

Intel Capital added it had made 59% of its investments outside of the US, with countries including Ghana and Spain receiving their first Intel Capital investments. The portfolio companies Intel Capital has invested in, are listed here.

Google Ventures, which in contrast to Intel Capital, only invests in the US at present, broke down its investments by sector, with 63% of investments going into either mobile (32%) or consumer internet (31%) deals. The third most active sector for the firm was commerce with 16% of activity, followed by big data with 10%, life sciences with 6% and energy with 5%.

The pair of corporate venturing unit also could become key exemplars of the two main investment philosophies of corporate venturing, with Intel Capital saying on its website its focus on “strategic value sets us apart”, while a Google Ventures spokeswoman said: “The other key difference [besides geographic focus] is that we are not a strategic investor like Intel Capital.  We invest for financial return, rather than to feed new ideas and companies back into Google.”

The search engine’s corporate venturing unit pointed to eight key exits, a quarter of which were to the search engine: Stamped (which sold to Yahoo!), Dasient (Twitter), Hipster (AOL), BufferBox (Google), PrimaTable (Hotel Tonight), Zencoder (Brightcove), Milk (Google) and ThinkNear (Telenav).

Intel Capital, reflecting its bigger size and longer history, said 30 of its portfolio had made exits, with AVG (NYSE), Vocera (NYSE), iMall (Naspers), Anobit (Apple), Gaikai (Sony), DynamicOps (VMware) and Perceptive Pixel (Microsoft) singled out for special mentions. This compared to six flotations and 28 portfolio company sales in 2011.

In terms of colour Google Ventures was more splashy, having an entertaining video, and name-checking portfolio accomplishments including a Nobel prize for Medicine, for portfolio company Ipierian’s Shinya Yamanaka.

All in all, 2012 has been an exciting year for these two titans of corporate venturing. Global Corporate Venturing is keen to reflect the activity of as much as the industry as possible. Do send details of your year in numbers to me at tlewis@globalcorporateventuring.com – we would love to pull out a page or two in our January magazine to sit alongside the years of Google Ventures and Intel Capital to showcase the achievements this year of those in the industry.