Google Inc (NASDAQ:GOOGL)‘s one year old subsidiary, Google Capital has one mission, to dig directly into the Chinese technological mines by funding the start-ups in this sector and the company made its first bet by backing InnoLight in a round of series C funding. Sonja Cheung reported, on the venture capitalists in Chininese tecnology space who are waiting to get their hands on the next big fish like Alibaba Group Holding Ltd (NYSE:BABA), on Wall Street Journal.
Google Inc (NASDAQ:GOOGL)’s first bet is in partnership with a Chinese venture firm Lightspeed China partners, and together the two partners put down $38 million on the table for the Suzho-based business in this round of funding.
Google Inc (NASDAQ:GOOGL)’s competitors who are also actively investing in Chinese start-ups include the likes of Baidu Inc (ADR) (NASDAQ:BIDU) and TENCENT HOLDINGS ADR (OTCMKTS:TCEHY). However, according to Cheung it makes more sense for InnoLight to parner with Google Inc (NASDAQ:GOOGL) given its strong position as a data facilities center of the world, rather than any other Chinese investor. This is because Google Inc (NASDAQ:GOOGL) could also provide technical expertise as it has prior experience in the market that InnoLight is trying to tap revenues from.
InnoLight Technology is basically a manufacturer of high-speed optical transceivers used between servers to communicate. While highlighting the technological skills that Google Inc (NASDAQ:GOOGL) brings to the table besides the funding of course, Cheung quoted James Mi, managing director of Lightspeed China Partners. Mi pointed out these skills as, “operational expertise and deep insight into core computer centre technology.”
Alibaba Group Holding Ltd (NYSE:BABA)’s recent IPO on NYSE, where it raised about $25 billion has got many businesses to think about finding such oil wells in the Chinese start-up scene for themselves.
Google Capital is Google Inc (NASDAQ:GOOGL)’s second start-up funding arm. The first one being Google Ventures which is restricted to investing in businesses during the initial stages of development. Cheung mentioned that Google Capital currently has ten growth stage investments, and InnoLight is the first Chinese venture.
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