Google Ventures, a VC fund financed by Google, is one of the top-10 investors in the cybersecurity space. The fund has $300 million to invest each year, and they look for the most innovative and interesting startup founders. Noteworthy cybersecurity investments they’ve made have gone into hot players including Duo Security, Recorded Future, Ionic Security, Shape Security, Synack and ThreatStream.
Earlier this year, Google launched Google Capital, a growth equity fund operating out of the Googleplex corporate headquarters in Mountain View, Calif. On the Google Official Blog, Google explains the difference between Google Ventures and Google Capital as follows: “While Google Ventures focuses mainly on early-stage investments, we’ll be looking to invest in companies solely as they hit their growth phase. That means finding companies that have already built a solid foundation and are really ready to expand their business in big ways.”
Google Capital has been actively investing since launch. Their portfolio companies include SurveyMonkey (Palo Alto, Calif.), a leading online survey company; LendingClub (San Francisco, Calif.), an online lender; Renaissance Learning (Wisconsin Rapids, Wis.), an online learning solutions provider; Auction.com (Irvine, Calif.), the nation’s largest online real estate marketplace; FreshDesk (San Francisco, Calif.), an online customer support platform; Glassdoor (Sausalito, Calif.), an online jobs and career marketplace; CommonFloor.com (Bangalore, India), India’s leading real estate platform; ZenPayroll (San Francisco, Calif.), a Web-based payroll service; and FanDuel (New York, N.Y.), the leading daily fantasy sports provider.
Sounds like Google Capital focuses mainly on Internet plays in and around its space – you know – global eyeballs and user bases, subscriptions, online advertising, give-it-away-for-free then upsell to premium services and services that may even be conducive to Google acquiring it as one of their own apps down the line. Surveys, online learning, jobs – all feel like natural fits to Google.
Well, think again because Google Capital’s first cybersecurity investment was just announced and it’s a biggie ….
CrowdStrike Inc. (Irvine, Calif.), provider of the first true Software-as-a Service (SaaS)-based next-generation endpoint protection platform, announced in a July 13, 2015, press release that the company has completed a $100 million Series C financing round, led by Google Capital. Rackspace, a CrowdStrike customer, also participated in the round along with existing investors Accel and Warburg Pincus. This brings the company’s total funding raised to $156 million.
“We were blown away by CrowdStrike’s incredible growth and impressive customer adoption,” said Gene Frantz, partner at Google Capital, in the Crowdstrike press release. “They have a truly unique SaaS-based endpoint security model, a highly scalable subscription revenue model and a visionary technical approach that has huge potential to transform the industry, which is why we’re thrilled to make this investment.”
The worldwide cybersecurity market is defined by market sizing estimates that range from $77 billion in 2015 to $170 billion by 2020, according to Cybersecurity Ventures’ Q3 Cybersecurity Market Report.
Cybersecurity is one of the fastest growing tech markets, and Google is all over it.
Google corporate has been acquiring cybersecurity companies to enhance its own apps and platform security since 2007.
Google owns and operates some interesting cybersecurity services, for instance VirusTotal.com, a free service that analyzes suspicious files and URLs and facilitates the quick detection of viruses, worms, Trojans and all kinds of malware.
Google is cooking up some interesting cybersecurity services for its esteemed developer community including a beta version of its Cloud Security Scanner launched earlier this year. The Google Cloud Security Scanner is designed to scan apps running in the cloud for security vulnerabilities.
Google Ventures and Intel Capital are the only corporate venture funds in the top 10 most active investors in cybersecurity, according to CB Insights.
Google’s chairman, Eric Schmidt is also the founder of Innovation Endeavors, a VC firm now active in the cybersecurity space. Illusive networks (Tel-Aviv, Israel) raised $5 million in Series A funding from cybersecurity think tank Team 8, which is a partner with Innovation Endeavors.
The Google website states that Googleplex is at the heart of everything the company does. And the way Google Ventures and Google Capital are investing, it seems like cybersecurity is going to be a big part of that.
Steve Morgan is founder and CEO at Cybersecurity Ventures and editor-in-chief of the Cybersecurity Market Report and the Cybersecurity 500 list of the world’s hottest and most innovative cybersecurity companies. Follow Steve on Twitter or connect with him on LinkedIn.