Interesting because according to crunchbase their $6M round with a16z was at a $22M Val. With a follow on debt financing, that indicates to me that they might have taken a down acquisition. Of course that was 2+ years ago. So if it was a 20M acquisition that means that the last two years of growth [2] wasn't good enough.
Given how much was raised by the company itself (~$200M according to https://www.crunchbase.com/organization/north-8daa) the acquisition seems like Google providing an exit opportunity for the company and its investors, arguably much better for the ecosystem than what Amazon does
A120 was never considered important to google innovation strategy.
In fact what did it accomplish for the business. Google would have a better roi giving the money to Google Ventures or a16z. Or starting a private equity like firm adding notable startups to the alphabet portfolio.
the products are already killed as a part of this acquisition. Google must think the market is worth pursuing if they're willing to dish out $180 million for the company, but considering they simultaneously announced the end of all product sales and no more focals 2.0, this is pretty clearly an acquisition for the patents and talent. They were already close to running out of money.
They have substantial revenue, so not taking much investment isn't surprising. I just wonder what the thought process was in deciding to sell to Google at this price.
This must still be a huge win for the founders. They probably still had most of the equity since they only took one round of financing, and at a point when the company was already mature.
The left sidebar has a list of Top Acquirers. Of course most of the prices are not disclosed. Off the top of my head, these YC startups had exits that are unknown, but are probably under $20 million:
It’s curious then that google still acquires companies. Surely someone has seen the writing on the wall and would decide to stop throwing good money after bad.
And the update to the article says they were competing with Google, Facebook, Baidu... could be google was getting rid of the competition for talent; and gaining ability to attract more talent.
Though if they're expected to do wonderful things, and they've been doing things for years... it seems a certainty that they have already done some of those wonderful things. And hence have something concrete worth acquiring. Which would explain the valuation.
I just wish the team woulda got a boost after the acquisition or immediately wrapped into Google Shopping.
Shopping was the logical place the product would fit, but it seemed like they weren't given much of a boost after the acquisition and they sort of slowed a bit.
Nope...I was responding to the OP's statement about not understanding how they could have turned down $6B from Google.
If they IPO and the company is worth $12B - $20B and all their investors get to cash out. As much of a shell game as it is, that would have been a fiscally prudent move by management.
Almost all popular Google products (other than search and Gmail) have come from acquisition: Maps, Analytics, Google Apps, Android, Blogger, Picasa, YouTube, Postini, reCAPTCHA, etc.
My good friends Robby & Wayne's company, Zenter, was acquired by Google in 2007. While Robby has since left, Wayne is now a very respected eng manager in charge of a very important project, so I would argue that acquisition was successful for them.
So while many acquisitions do not work out well (and usually loudly), it would be a big mistake to pretend that applies to all acquisitions.
BS. I think Google is going to slow down on the acquisitions. Based on the ratio of projects they buy that die, I think they're going to begin pushing for more internal development and less acquiring outside technologies.
Of course if a site is a sensation and has an established community in a short time that may be worth purchasing but overall I don't think we'll see Google going after any of these.
Google did a $70B stock buyback last year. Every year they are doing similar numbers for the last 5 years.
In 2012 they had $50B cash on hand. Today despite the buybacks every year they still have $100-150Billion cash on hand, while Comcast is only worth $150 Billion.
They could absolutely afford it now and most likely 10 years back as well without even considering financing the deal.
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Google is just very bad at acquisitions, they simply are too risk averse and don't have the DNA.
Compare with a peer like Microsoft in the same time frame: bought Linkedin($24B), Github ($8B) Activision($70B) invested in OpenAI ($10B),
or Facebook : Instagram($1B), Occulus($3B), WhatsApp($19B).
Mandiant is the only acquisition of note since Motorola even that is pretty small at $5B.
[1] https://www.crunchbase.com/organization/product-hunt#/entity
[2] https://www.google.com/trends/explore?q=product%20hunt
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