Google’s $2.4 billion deal with Windsurf has been split into two equal parts. $1.2 billion went to investors, while the other half was used for compensation packages for about 40 Windsurf employees hired by Google. A large part of this $1.2 billion went to the startup’s co-founders, Varun Mohan and Douglas Chen.
The deal was very good for the venture capital firms involved, including Greenoaks, Kleiner Perkins, and General Catalyst. Windsurf had raised a total of $312.5 million before its last fundraise in 2024, which valued the company at $1.25 billion. The payout to investors resulted in about a 4x return on their original funding.
Greenoaks, which led Windsurf’s seed and Series A financings and owned 20% of the company, returned about $500 million on its $65 million investment. Kleiner Perkins, which led the Series B round, returned about three times its invested capital.
Employee disappointment in Google acquisition
However, the deal left many of Windsurf’s roughly 250 employees unhappy, especially those who had been expecting a payout from a previously expected sale to OpenAI, which did not happen. Instead of getting a payout, the 200 employees not hired by Google did not benefit directly from the deal. Investors chose to leave over $100 million in capital with the company instead of taking the entire payment from Google.
Some insiders said the money left would have been enough to pay remaining employees based on the Google deal’s per-share valuation, but doing so right away would have put the company’s ability to operate at risk due to a lack of future investment. Also, some employees hired by Google found their stock grants taken away and their vesting timelines reset, meaning they would have to wait an additional four years to receive their payout in Google stock. Several top venture capitalists criticized Windsurf’s co-founders for not sharing more of the money with their team.
After several days of uncertainty following the Google deal announcement, Windsurf’s remaining entity, under interim CEO Jeff Wang, was acquired by Cognition. This acquisition included Windsurf’s IP and product, along with the staff not hired by Google. Sources estimate Cognition paid $250 million for Windsurf’s remaining assets, allowing every employee to benefit financially from this subsequent sale.
