London corporate finance is about to receive a major boost, both on an actual financial level and in terms of PR. The UK capital has been chosen by Google as the European capital of its venture capital arm, underlining the importance of the city as a European technological hub. With a sizeable fund, Google will provide an additional source of revenue for fledgling start-ups and could become an important local go-to player for European business transfer agents who no longer need to enviously look over the Atlantic.
London continues to have the most advanced digital landscape in Europe, having become a hub for those who know how to build Internet companies. Silicon Valley companies are expanding their presence in London, with Facebook having an engineering team in addition to the Google office. UK-based venture-backed tech start-ups raise more money and there were more exits by UK companies over the past five years than elsewhere in Europe.
The new European branch of Google Ventures will have five general partners, namely Eze Vidra, who set up Google Campus in London; serial entrepreneur Tom Hulme; UK angel investor and adviser Peter Read; Avid Larizadeh, the head of the UK arm of code.org and co-founder of Bottica.com; and venture capitalist MG Siegler. The Google Ventures office will be located in Clerkenwell, a short distance from the East London Tech City environment. However, the London location is more a base for Google Ventures to survey Europe’s many start-up ecosystems and cherry-pick start-ups from all over the region for investments, as opposed to a focus on the UK scene itself.
Google is certainly a bit late into the European tech area, with companies such as Intel Capital already having a well-established portfolio of European tech investments. Nonetheless, more valuable than the investment in Europe’s high-tech start-ups could be the potential relationship with Google itself, its technologies and market position. European high-tech firms often look enviously at the supply of risk capital available in the US and the arrival of Google Ventures in Europe goes some way to redressing the balance of risk capital in Europe. Only time will tell if Google is on a technology shopping spree or has a real interest in building Europe’s next-generation of high-tech companies.
Regardless, this is fresh validation for the UK and London’s position at the heart of the European technology industry. London corporate finance has never been healthier. The initial Google fund has been set at $100 million but will likely grow as Google eases into the rich European digital landscape. Investments could pour to anywhere from Shoreditch to Stockholm and Berlin to Helsinki.
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