Weeks after the revelation that Google paid Windsurf $2.4 billion to license its technology, while simultaneously hiring away its CEO and top talent, the deal’s implications are still rattling some founders and startup employees across Silicon Valley.
Google’s payment to the startup was effectively split in two equal parts, according to two people familiar with the deal. Investors’ portion was $1.2 billion.
The other half was in the form of compensation packages for approximately 40 Windsurf employees hired by the tech giant with a substantial portion of that $1.2 billion going to the startup’s co-founders, Varun Mohan and Douglas Chen, sources say.
The transaction was a good outcome for VCs, which included Greenoaks, Kleiner Perkins, and General Catalyst. Windsurf raised a total of about $243 million as of its last raise in 2024 that valued the company at $1.25 billion, which means the total return to investors was about 4x their original funding.
Greenoaks, which led Windsurf’s seed and Series A financings and owned 20% of the company, returned about $500 million on their $65 million investment in the startup, according to a person familiar with the matter. Kleiner Perkins, which led Windsurf’s Series B, returned about 3x its invested capital, according to another person familiar with the deal.
Google, Kleiner Perkins, and Greenoaks declined to comment. General Catalyst, Varun Mohan, and Douglas Chen didn’t respond to a request for comment.
Even so, most investors were aiming for a more significant win from the company.
Techcrunch event
San Francisco
|
October 27-29, 2025
In February, TechCrunch reported that Kleiner Perkins was in talks to lead a fresh round of funding, valuing the startup, which was then known as Codeium, at $2.85 billion. That deal didn’t happen, according to a person familiar with the matter, because Windsurf had instead agreed to be purchased by OpenAI for $3 billion.
As we all know now, the OpenAI acquisition unraveled and Google swooped in with its deal structured to offer investor returns and obtain talent and IP without acquiring stock.
But what’s rattling the Valley is this: While Google’s deal was good for the co-founders and VCs, …