Do you think of Google as a “Web3” company? No? Well at least as far as their investing portfolio is concerned, they’re pretty deep into blockchain and crypto technology, just based on the investment rounds they were party in.
Blockdata, a crypto research firm, released an updated blog post Tuesday showing who’s been the most active investors in the crypto scene from September 2021 through June 2022. Researchers noted big tech firms including the likes of Tencent, Microsoft, PayPal, Samsung, and Alphabet (Google) are putting big money into crypto companies and startups.
Some of these companies, like PayPal, have been a longtime and verbal supporter of blockchain tech (thanks in part to its co-founder Peter Thiel). Still others, like Google, have been much more subdued. Earlier this year, CEO Sundar Pichai told investors they were “definitely looking at blockchain, it’s such an interesting and powerful technology with broad applications.” The Google boss further said they plan to allow blockchain-based businesses to use cloud computing and want to incorporate NFTs and crypto payments into their various platforms. Still—so far this year—we’ve not seen hem nor hair of any public blockchain projects, despite creating a new blockchain group this past January.
What Google chooses to invest in may help answer where the company wants to see blockchain tech go, or what it may want to incorporate into its own tech infrastructure. In the report, Alphabet, the parent company of Google, sat at the top of the pile showing it had been party to some of the biggest crypto company investments over the past year.
Google took issue with how the report was structured, saying that the numbers were inaccurate since they only pointed to the total size of the individual funding rounds, rather than Google’s contribution in each round. In an email statement, a Google spokesperson said: “As the report says, while the small number of Blockchain related companies we’ve invested in have raised $1.5b in total, we have only invested a small fraction of that ourselves.”
So even if Google’s full contributions are less than the report likes to conflate, they are still investing in Blockchain tech. Some of the company’s overall funds went to the likes of Dapper Labs, the company that was behind the NBA’s Top Shot and UFC Strike licensed video NFTs. The company was also behind CryptoKitties, a NFT-based game that’s seen the price of its products tank. Dapper said they are meshing their own Flow blockchain systems with their Google cloud infrastructure.
What makes this more complicated is there are actually two of Google’s investing arms involved in this fundraising. GV (Google’s investing arm once called Google Ventures) helped fund Dapper Labs and another crypto infrastructure company Voltage, which got $6 million in total investments at the start of 2022. CapitalG, the company’s independent private equity firm, had a hand in the $550 million raised by Fireblock, a crypto custody firm, as well as investments with digital currency venture capital company Digital Currency Group
Of course, this was all before the most recent crypto crash, which has seen a multitude of once-strong crypto companies layoff thousands of workers. Multiple crypto exchanges proved unreliable as they restricted users from withdrawing their funds, fearing they would lose all liquidity. Another of Google’s investments, the Digital Currency Group, apparently had a $1.2 billion claim against Three Arrows Capital, according to Bloomberg citing anonymous sources familiar with the proceedings. If you don’t know, Three Arrows Capital collapsed and was ordered to liquidate back in June, taking many beleaguered crypto companies down with it.
A representative from GV declined to comment about how they make investing decisions.
Though it’s not like this is the first time we’ve heard about Google’s parent company Alphabet with their big financial interest in blockchain companies. They’ve been investing in this tech since 2016, according to the Blockdata report. Previous reports showed they had put money into crypto companies like Ripple (which just like many small altcoins since the recent crypto crash, isn’t doing too hot). Google had previously made much wider investments across a wider variety of blockchain-based companies.
That was then, and this is now. Blockdata analysts said this limited slate of investments is an attempt to make concentrated bets on a small set of companies, but even with executive’s stated hopes for blockchain tech, it’s hard to see all investments truly panning out.
Though it was fourth in the size of its contributions, Samsung was leading the pack in the number—and eye-twitching variety—of crypto ventures it was making it rain on over an incredible 13 rounds of investing. A total of $979.26 million went to the likes of Dank Bank, a NFT platform for trying to monetize “memes and other iconic moments in internet history.” They put more of their funds behind Yuga Labs, the creators of the Bored Ape Yacht Club NFTS. They put down their investment in March, but in April, users on the group’s official Instagram and Discord were scammed of nearly $13.7 million worth of NFTs. Still, founders said many of BAYC’s rather strange initiatives like a Bored Ape “Metaverse” are still moving full steam ahead.
They also put money into Sky Mavis, the makers of the crypto-based “play-to-earn” game Axie Infinity. That investment probably didn’t do them any wonders considering its token bridge suffered one of the biggest hacks in crypto history earlier this year. The game has struggled to recover after that blow, though players had already been leaving the platform before hackers snatched away bridge funds.
Not every investment is going to pan out, of course. Massive companies’ diversified investment portfolio is just like any other gamble, and they have to take into account the risk and reward. Blockdata’s research shows that 81 of the top 100 public companies have made some kind of past or present crypto investment. 2021 showed the absolute highest amount of overall investment in blockchain companies. Funding totals have increased by a factor of 14 from 2019 to last year.
In a blog post earlier this year, Samsung Next explained why it was investing so heavily into Web3 and blockchain projects. They talked up how Yuga Labs’ community is hyping up their own product to inflate the value of their NFTs, further stating that digital identities are transforming from self identification to “pseudonymous identities” represented by NFTs. As far as Axie Infinity is concerned, the investing arm lauded its “play to earn” model that “not only facilitates player monetization, it has the potential to enable the use of token-based characters across different games.”
Samsung Next did not immediately respond to Gizmodo’s request for comment about what it looks for in a blockchain-based project.
Updated 8/17/22 at 4:55 p.m. ET with comment and investment clarification from Google