New York-listed search engine group Google has backed a renewable energy project even as it prepares for a "slow" global roll out of its corporate venturing unit, Google Ventures, outside of the US.
Good Energies, a Switzerland-based investor in renewable energy and energy efficiency industries, Google and Japan’s Marubeni trading company have invested in the Atlantic Wind Connection (AWC), an electricity transmission project for the eastern US coast. When fully complete, the transmission backbone will provide about 6,000MW of offshore wind capacity, enough power to serve 1.9 million households. Good Energies will invest 37.5% of the development capital in the project run by a separate company, Trans-Elect.
Google’s investment is coming from the main group, rather than its corporate venturing unit, Google Ventures.
Rick Needham, green business operations director at Google, said: "From the Great Plains to the waters off the coast of Northern Europe, windmills churn out clean power that lights our homes and powers our economies. We are pleased to support this investment that will ultimately enable the Mid Atlantic to benefit from the tremendous wind resource off its coast."
Anil Hansjee, head of mergers and acquisitions in Europe, Middle East and Africa for Google, in a panel discussion at the European Private Equity and Venture Capital Association said the company had a diversified portfolio of organic developments, such as Wave; acquisitions, which formed the basis of its Android operating system that now has revenues of more than $1bn in mobile search; and corporate venturing.
He said the corporate venturing was done with a commercial driver or in companies offering potentially disruptive technologies that the whole company could benefit from by enabling faster search.
Hansjee said the launch of Google Ventures last year to invest up to $100m per year was with a pure financial focus to leverage the assets of Google in selecting companies.
He said: "Google has plenty of smart people with insights into big, disruptive technology and Google Ventures invests for a return on investment regardless of potential future involvement by the company.
"In fact Google Ventures steers clear of those for fear of being tainted. The same team cannot play with two hats [strategic and financial returns].
"The financial team [Google Ventures] are incentivised as a venture capital firm are with professional portfolio managers. The team are gelling in the US and its nine partners have done 10 deals this year but it is likely to be a slow roll out globally."
Hansjee remains on the board of legacy European corporate venturing deals he made, such as Fon, Ubiquisys and DotMobi, struck before the group decided to set up its Google Ventures unit and concentrate on the US market. Although these deals had done well, he said Google Ventures was set up after "learning the hard way" that it had to be "a commercial deal with real hooks and people on the line to deliver not an investment that might have strategic ambitions".