For close to 15 years, Google has used acquisitions not just to grow its footprint or consolidate competition, but to build new products. Google Maps, for example, was the result of two acquisitions: Sydney-based Where 2 Technologies and a small geodata visualization startup called Keyhole.
When Google announced its new phone, the Pixel, earlier this month, we used the PitchBook Platform to conduct an in-depth analysis of the company's corporate development strategy.
Interestingly enough, we spotted eight deals in the last two years that likely contributed to the Pixel’s development. Here’s an overview:
February 2015 – Acquired NimbuzCloud
NimbuzCloud was a provider of cloud-based storage for consumer photos and videos, as well as a platform that enabled users to sync, view, share and store their photos and videos in the cloud, at full resolution. This is very similar to the full-res photo and video storage Google is offering with the Pixel.
April 2015 – Acquired Skillman & Hackett
Skillman & Hackett developed a virtual reality painting studio and other art applications. Google likely acquired the company to create software for the Daydream View, the VR headset compatible with the Pixel. The PitchBook Platform lists the company’s co-founder, Patrick Hackett, as a VR UX designer for Alphabet.
June 2015 – Acquired Lumedyne Technologies for $85M
Lumedyne Technologies designs and develops sensors used in consumer electronics such as accelerometers, gyroscopes, pressure sensors, temperature sensors and magnetometers. The Google Pixel contains an accelerometer and gyroscope, along with a proximity sensor, ambient light sensor and fingerprint sensor. Google acquired the company for $85M from Space Angels Network, an angel group that invests in astrotech startups.
October 2015 – Bought a minority stake in Deutsches Forschungszentrum für Künstliche Intelligenz (DKFI)
Google Germany acquired a minority stake in DKFI, a tech firm specializing in AI development for scientific evaluation and monitoring. The upgraded Google Assistant, launching with the Pixel, will use a natural language-driven interface that connects with AI to compete with products like Amazon’s Alexa and Apple’s Siri.
February 2016 – Series C investment in Magic Leap
Magic Leap is developing wearable AR technology. Google invested in a $793.5 Series C round, along with a number of VC firms and the corporate venture arms of Qualcomm and Alibaba. It’s a natural strategic partnership for Google, especially now that they’re venturing into VR and smart phone development. Google also invested in a $542 million Series B in 2014.
April 2016 – Acquired Statsbot
Statsbot makes a chatbot that integrates with Google Analytics, Mixpanel and Salesforce to deliver analytics directly into Slack. It’s the kind of integration and natural language processing that we’ll see at work in Google Assistant.
July 2016 – Acquired Moodstocks
Moodstocks built technology that used machine learning to perform real-time image recognition. Unlike Google’s own processor-heavy experiments in image recognition and generation (DeepDream, DeepStereo), Moodstocks' software was simple and lightweight enough to be delivered to mobile applications via a SaaS platform. Google may have killed two birds with one stone here—an acquisition that bolstered its image-based AI development, as well as its mobile applications development.
September 2016 – Acquired Speaktoit
Speaktoit (also known as Api.ai) developed a conversational platform offering natural language interactions for devices, as well as tools for other developers to build conversational user interfaces for apps and hardware devices. The company was valued at $25 million in August of 2015. With Google expanding the functionality of its natural language-driven Google Assistant, it’s easy to see why it would be interested in Speaktoit.
The intentionality behind these acquisitions shows great strategy, forethought and responsiveness on the part of Google’s corporate development team. Time will tell if Google’s October hardware blitz pays off or goes the way of Google Glass.