Last June, Google announced its intention to purchase business intelligence startup Looker for $2.6 billion. However, the Big Tech giant’s plans hit a snag after a British regulator decided to investigate if the merger would create antitrust problems. However, on February 13, the Competition and Markets Authority (CMA) officially gave the deal approval to proceed.
Google’s Plans to Acquire Looker
Last summer, Google made public its intention to buy Looker in an effort to bolster its Google Cloud segment. Prior to its acquisition, the startup had secured $280 million in funding on the strength of its data analytics capability. As such, the Silicon Valley titan, which has been working to increase its cloud offerings, viewed a tie-up as a smart strategic move.
Also, the two firms had a previous working relationship and shared 350 clients. Therefore, Google has had no issues making its most significant cloud industry purchase to date. Before this acquisition, the firm’s largest buy in the sector happened in 2016 when it paid $625 million for API management platform Apigee.
Looker’s last valuation pegged its worth at $1.6 billion, meaning Google paid a $1 billion premium for the startup.
At the time, the corporation sought to add the analytics company to its portfolio by the end of 2019. However, the CMA’s anticompetitive review of the deal delayed the transaction. Nevertheless, the agency found no reason to stop the acquisition after completing its inquiry.
The CMA noted the two companies aren’t competitors in the business intelligence field. Moreover, the organization determined the acquisition wouldn’t deprive other companies of corporate data analytics resources. The U.S. Department of Justice already approved the purchase back in November.
Before news of its acquisition broke, Looker serviced 1,600 clients and had an annual run rate of $100 million. The Santa Cruz, California-based firm named The Economist and mobile games developer King among its customers.
Google’s Recent Spate of Cloud Related Acquisitions
Once Google’s purchase of Looker is complete, it will be the company’s third cloud-related purchase of the New Year.
Last month, the Alphabet subsidiary acquired Irish startup Pointy for a reported $163 million. Before being bought out, the firm offered a hardware-enabled software solution for brick-and-mortar retailers. Clients could utilize the company’s scanners and network to automate the online listing of their inventory. Market analysts believe Google made the purchase to put itself on better footing with the U.S.’s largest e-commerce company.
Pointy also provided its clients with analytics to help improve their purchasing and sales.
In addition, the conglomerate acquired a no-code application development company called AppSheet. The startup gave corporations the ability to create branded mobile apps without using a programming language. Already interoperable with Google Cloud, the transaction allowed the Big Tech firm to expand its cloud portfolio seamlessly.
Last year, the Alphabet subsidiary acquired three companies to diversify its cloud offerings. In February 2019, the company bought a cloud migration company called Alooma. Five months later, the conglomerate snapped up enterprise storage firm Elastifile. Lastly, Google obtained virtualization startup CloudSimple.
Research firm Gartner reports the global cloud services market will reach $249.8 million in value this year. Besides, the industry will be worth an estimated $289.1 million by 2021. As such, Looker is unlikely to be the last cloud startup Google buys in 2020.