Not long ago, Google had one of the biggest social networks — at least in Brazil and India.
Google keeps ex-Googlers close by investing in their startups
One check went to the new social network from the founder of Orkut.
Photo by Justin Sullivan/Getty Images
Social site Orkut had a sizable presence in those two countries but not elsewhere, leading Google to shut its doors in 2014. The founder, Orkut Büyükkökten, is trying again with Hello Network, a new network based on interests.
Hello is not part of Google — but it’s got some Google cash.
According to multiple sources, Google has recently backed several early startups from former employees, including Hello, adding to Google’s already complex weave of corporate financing.
It’s unlikely Google is deploying these funds to dig back into social media or generate massive returns. Instead, these deals seem mostly about Google’s ongoing attempt to keep familiar engineers close to the company fold.
A rep for Google declined to comment. Büyükkökten and two other founders backed this way — Keith Coleman and Noam Lovinsky, former Google product managers — did not return requests for comment.
Google is funding the companies using convertible notes, according to a source familiar with the deals. While Google’s staff is acting as an adviser, the search giant does not have special rights in the terms, like first dibs on an acquisition, according to the source.
These funds are coming directly from Google, the internet company, generated by M&A boss Don Harrison and his team. They’re not from Google Capital or GV, the investment arms of Google parent Alphabet, which back bigger startups.
I don’t know how large these investments are, but sources indicate that they’re less than $10 million. And Google has quietly been making these sorts of investments over the past couple years.
This arrangement is different from bigger strategic investments Harrison et al. have made off Google’s balance sheet — like those in Elon Musk’s SpaceX and augmented reality whatsit Magic Leap.
It’s also different from Area 120, the startup incubator that Harrison is helping to oversee, which hopes to keep Googlers with an entrepreneurial itch inside the company.
In essence, Google has long fixated on keeping its fingers in every cranny of Silicon Valley. Here are some more tentacles.
This article originally appeared on Recode.net.
