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Chart: Vetting Alphabet’s $4 Billion in “Other Bets”

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Chart: Vetting Alphabet's $4 Billion in Other Bets

Chart: Vetting Alphabet’s $4 Billion in “Other Bets”

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Regardless of whether the policy remains in place today, one of Google’s most famous management philosophies has been the “20% rule”. Legend goes that especially in Google’s earlier days, employees were encouraged to spend 20% of their time working on new initiatives that could potentially benefit Google outside of their regular workflows, teams, and projects. This meant there was time to explore new ideas or to challenge existing status quos within the organization.

It’s a seemingly arbitrary and systematic way to spur innovation, but it has worked well over the years. The 20% rule has apparently led to new products such as Gmail, Google News, and AdSense, which are all important aspects of Google’s business today.

It should not be surprising then, that Google’s parent company Alphabet also takes a systematic approach to innovating outside of its core search business. By making ambitious “Other Bets” and keeping investors up-to-date with their own segment on the company’s financial statements, Alphabet shows both commitment and discipline in finding its next multi-billion dollar game-changer.

“Other Bets”

In 2016, Alphabet was a cash machine. The company raked in $19.5 billion of profit off of a whopping $87.4 billion of revenue.

The only challenge? If you do the math, 99% of that revenue comes from Google, which currently dominates digital advertising with a 41% share of the entire market.

Wisely, the company does not want to put all of its eggs in one basket – and it spends about 7% of its annual operating costs on facilitating “Other Bets”. Here is what else Alphabet is up to:

Google Fiber
Google Fiber aims to provide internet at super speeds across the United States. Rollout has been costly though and only nine locations have been launched since 2010.

Calico Labs
Calico Labs is made up of elite scientists with $1.5 billion worth of funding to research the causes of aging and how to expand the human life span.

Nest
Founded by two former Apple engineers, Nest produces smart-home technology such as sensor-driven, Wi-Fi-enabled thermostats.

Verily
Verily’s mission is to reinvent healthcare using groundbreaking technology and data, such as a glucose-sensing smart contact lens for diabetics.

GV
GV, formerly known as Google Ventures, is Alphabet’s venture capital investment arm, making strategic investments in startup companies in fields such as life sciences, agriculture, and robotics, to name a few.

CapitalG
CapitalG makes investments that are “return-driven”, focusing on growth stage companies, such as Stripe, Airbnb and SurveyMonkey.

X
X uses breakthrough technology as a radical solution to big problems. Its most famous projects are its self-driving car and Google Glass.

Which “Other Bets” are Paying Off?

“Other Bets” generated $809 million in revenue in 2016, which is a 82% increase over 2015. This revenue came mostly from Nest, Fiber, and Verily.

Nest, which aims to dominate the smart home of tomorrow, was acquired for $3.2 billion in 2014. And while it does generate revenue for Alphabet, it has been viewed mostly as a disappointment even from the company’s perspective.

Verily is Alphabet’s business in life sciences, and is apparently profitable already. The unit partners with pharmaceutical companies to make money, and it will also eventually move forward with human clinical trials on its smart contact lens product.

Lastly, Fiber has been rolled out in nine cities across the United States to provide ultra-fast broadband speeds for internet and television. In recent news, Fiber has laid off employees, while halting many further expansion plans.

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Ranked: The Top Startup Cities Around the World

Here are the global startup ecosystem rankings, highlighting the scale and maturity of major tech hubs worldwide.

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This bar chart shows the top startup ecosystems in the world in 2024.

The Top Startup Cities Around the World

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

A richly connected network of founders, venture capital firms, and tech talent are some of the key ingredients driving a startup ecosystem.

As engines of growth, these tech clusters are evolving on a global scale. While the world’s leading startup cities are concentrated in America, several ecosystems, such as Beijing and Seoul, are growing in prominence as countries focus on technological advancement to spur innovation.

This graphic shows the best startup cities worldwide, based on data from Pitchbook.

The Global Startup Ecosystem Rankings

To determine the rankings, each city was analyzed based on the scale and maturity of their startup ecosystem over a six-year period ending in the second quarter of 2023.

Among the inputs analyzed and used to calculate the overall development score were fundraising activity, venture capital deals, and exit value:

RankCityDevelopment ScoreCapital RaisedDeal CountExit Value
1🇺🇸 San Francisco90$427.6B19,898$766.3B
2🇺🇸 New York76$179.9B13,594$171.7B
3🇨🇳 Beijing76$161.2B8,835$279.2B
4🇨🇳 Shanghai73$130.3B7,422$186.8B
5🇺🇸 Los Angeles71$144.6B9,781$181.4B
6🇺🇸 Boston70$117.0B6,044$172.8B
7🇬🇧 London64$99.0B11,533$71.9B
8🇨🇳 Shenzhen63$46.4B5,020$66.3B
9🇰🇷 Seoul61$31.1B6,196$71.0B
10🇯🇵 Tokyo60$26.2B5,590$28.0B
11🇨🇳 Hangzhou59$50.7B3,361$88.7B
12🇺🇸 Washington D.C.55$43.7B2,706$28.2B
13🇺🇸 Seattle54$31.7B2,693$35.6B
14🇸🇬 Singapore52$45.7B4,507$38.0B
15🇺🇸 San Diego52$33.5B2,023$44.7B
16🇺🇸 Austin52$26.4B2,636$22.9B
17🇨🇳 Guangzhou52$24.7B1,700$24.0B
18🇮🇱 Tel Aviv51$21.0B1,936$32.2B
19🇺🇸 Denver51$26.8B2,489$29.9B
20🇩🇪 Berlin50$31.2B2,469$15.9B

San Francisco dominates the pack, with $427.6 billion in capital raised over the six-year period.

Despite a challenging funding environment, nearly 20,000 deals closed, highlighting its outsized role in launching tech startups. Both OpenAI and rival Anthropic are headquartered in the city, thanks to its broad pool of tech talent and venture capital firms. Overall, 11,812 startups were based in the San Francisco Bay Area in 2023, equal to about 20% of startups in America.

Falling next in line is New York City, which raised $179.9 billion over the same time period. Crypto firm Gemini and machine learning company, Hugging Face, are two examples of startups based in the city.

As the top-ranking hub outside of America, Beijing is home to TikTok’s parent company, ByteDance, which is one of the most valuable private companies in the world.

In recent years, much of the startup funding in China is being driven by government-backed funds. In particular, these funds are focusing heavily on “hard tech” such as semiconductor-makers and electric vehicle companies that align with the government’s strategic long-term goals.

Another leading tech hub, Singapore, has the highest venture capital funding per capita worldwide. In 2023, this was equal to an impressive $1,060 in venture funding per person. By comparison, venture funding was $345 per person in the U.S., the second-highest globally.

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