As we look at Alphabet’s startup investment activity, however, it’s clear health care comprises a major share of deals for Google’s parent company. Since 2020, the tech giant and its affiliated venture funds have led 25 health-related rounds collectively valued at just over $1.6 billion, per Crunchbase data. Health-related rounds where the firms and affiliates participated number more than 100 in the past two years.
To date, meanwhile, Alphabet and affiliated funds have led 76 rounds for health care and biotech companies, with those rounds collectively valued at just over $4 billion, and they’ve participated in over 260 rounds. Several of its portfolio companies have gone on to multibillion-dollar valuations, including cancer screening platform Grail, gene-editing company Editas, and primary care provider One Medical.
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Google is so valuable that what it does with even a tiny pittance of its net worth can create market-changing dynamics. To see if this is the case with health care investment, we set out to take a closer look at the tech giant’s activity in the space of late, as deal pace quickens and exits accumulate.
Scope of health care investment
Although it has the capital to partake in big later-stage rounds, Google’s health investment activity has typically skewed early stage. The vast majority is via GV, the venture firm spun out of Google that counts Alphabet as its sole limited partner.
Today, over half the investment team at GV focuses on health care and life sciences, the firm told Crunchbase News. That means there’s heavy representation of medical doctors and life science PhDs in its partner lineup, including managing partner Krishna Yeshwant, a physician and programmer, and general partner David Schenkein, a hematologist and former pharma CEO.
They’re keeping busy. In 2021 alone, GV has taken part in more than 50 funding rounds for health and life sciences investments, Crunchbase data shows. We put together a list below:
GV is a major investor in many of those rounds. Companies in which it has led or co-led investments recently include cancer precision medicine startup Treeline Biosciences, gene-editing company Prime Medicine, virus prevention-focused Leyden Labs, and youth-focused behavioral health care provider Brightline.
Health is by no means a new focus area for GV. One of its first investments after launching in 2009 was Adimab, a pioneering antibody discovery startup. GV’s founder, Bill Maris, who is no longer with the firm, is also a prominent health care investor. To date, the firm has participated in at least 235 health- and bio-related funding rounds.
As for the current investment environment, GV tells Crunchbase News that “there has never been a better time” to invest in and build transformative health care companies.
Health less prominent for growth investment arm
While GV has made a name for itself as a prolific health care dealmaker, Alphabet’s growth stage investment arm, CapitalG, is much less active in the space.
To date, the firm has just a handful of health-related deals under its belt. In recent quarters, the only addition has been Strive Health, a provider of a service and technology platform designed for total care of chronic kidney disease and end-stage renal disease. CapitalG led the Denver-based company’s $140 million Series B round in March.
On the exit front, CapitalG and Alphabet were also backers of health insurer Oscar, which went public in March. It’s been a poor performer of late, with shares hitting an all-time low this week after a prominent analyst put a sell rating on its stock.
When it comes to big health care exits, GV has a far longer list.
So far in 2021, the firm says it has seen nearly 20 portfolio exits in health care. The list includes Grail, which was acquired by genetic sequencing giant Illumina for around $3.5 billion, as well as public offerings on Nasdaq for gene-editing company Verve Therapeutics and vaccine developer Vaccitech.
GV has also seen portfolio companies get acquired or go public at high valuations in recent years. Some of the larger ones are Flatiron Health, acquired by Roche for $1.9 billion and One Medical, which went public in 2020.
Not every exit is a home run, though. One that’s been a disappointment of late is Adagio Therapeutics, which went public on Nasdaq this year but saw an 80 percent valuation wipe-out this week after lab data showed its antibody therapeutic was not effective against the Omicron variant of COVID-19.
The forecast? More deals, more money
With a market capitalization of $1.9 trillion and more than $140 billion in cash on its balance sheet, Google is not lacking money to invest.
Given that, to date Google and GV have acted principally as financial investors in their health and bio portfolio companies. Its most recent investments, in cancer diagnostics, mental health and immunotherapy, are also a far cry from the tech giant’s core business.
We don’t see strategic tie-ups. Nor is there an expectation among portfolio companies that Alphabet will swoop in to acquire them.
But for now, funds continue to flow to health and bio startups—with no indication yet of a change of tides.
Illustration: Dom Guzman
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