Overview:
On June 06, 2019, Google announced that it has entered into an agreement to acquire Looker, a unified platform for business intelligence, data applications and embedded analytics, for $2.6bn in cash. This is the first major acquisition under Google Cloud’s new head Thomas Kurian and is the third largest acquisition in Google's 21 year history, behind Motorola and Nest. The transaction is expected to complete later this year. Microsoft and Amazon were the other front line bidders for the business.
Founded in 2012, Looker is headquartered in Santa Cruz, California and has more than 600 employees. Looker has over 1,600 customers and major companies like Amazon, IBM, Lyft and Sony have used the company’s platform. Google and Looker are well acquainted as they jointly share over 350 customers including BuzzFeed, Hearst, King, Sunrun, WPP Essence and Yahoo.
Valuation:
In 2017, Google’s growth equity fund CapitalG led an $81.5m investment valuing the company at $850m. Looker has raised a combined $285m and was last valued at $1.6bn in December 2018.
The $2.6bn acquisition – a 63% premium to the valuation from six months ago – represents a sales multiple of 18.6x - 14.4x based on broker estimates of $140- 180m revenue for 2019. Looker’s CEO Frank Bien reported that the company had crossed $100m in revenue and is still growing at 70% year over year.
Transaction rationale:
The acquisition will help Google Cloud offer a more complete analytics solution from ingesting data to visualizing results and integrating data and insights into daily workflows. Google Cloud aims to combine its BigQuery data warehouse with extended business intelligence and visualisation tools from Looker. This will provide an end-to-end analytics platform to connect, collect, analyse and visualize data across Google Cloud, Microsoft Azure, AWS, on-premises databases and ISV applications.
The announcement strengthens Google’s strategic commitment to multi-cloud. Deeper integration of Looker into Google Could Platform (GCP) will help provide customers with multi-cloud functionality and enable them to bring data from SaaS applications like Salesforce, Marketo, Zendesk and traditional data sources.
The transaction follows recent acquisition of Alooma and Cask Data – which added ETL tools and Google Cloud Data Fusion data pipelining tools respectively. The acquisition of Looker will bridge the gap with competitor offerings in the cloud space from AWS and Microsoft Azure.