Indian tech startups are finally taking off, especially in the fields of mobile technology, social analytics and cloud driven applications. India has always possessed a mixture of talent and energy that has fostered the development of intellectual property within the country and made it the laboratory of services and products for the world. Heard of Gecko by Connovate Technology , Fin by RHL Vision or the Sixth Sense by Pranav Mistry? These are all names of some marvelous devices with Indian inventors. What all these devices have in common is a technology which to a common man would appear ahead of its time. Each one of them symbolizes the power of innovation and aims to change the way we do things in our daily lives.
One of the better barometers of the startup scene is how multinational companies are looking at local startups for acquisitions. While that has been a rare occurrence till now, things are finally brightening up. Earlier this month the two year old Bangalore based startup ‘Little Eye Labs’ was subject to a $9 million acquisition by Facebook. Google was quick to follow with its acquisition of Imperium, a three year old web security company. Such large companies acquiring such young ones in deals of this size are a testimony to the quality that the Indian companies possess. All in all a total of 100 startups were acquired by overseas companies in 2013 (though 6 less over the previous year), including some huge deals. This article is a compact list of 5 such deals involving immense sum of money.
Prizm Payment Services by Hitachi:
Hitachi set the bar pretty high for Indian acquisitions when it went on to acquire Prizm Payment Services in November 2013 for a sum reported in the region of $250 million, however no official statement was released by either of the two companies. Prizm Payment Services had revolutionized payment services using ATMs and PoS systems, in India prior to its acquisition. It had over 1100 employees and some big name investors in the form of Axis Bank and Sequoia Capital. However that did not deter Hitachi to acquire a 100% stake in the company in a transaction that is not due to finish until later this month. This deal however has a larger significance in a broader sphere. It shows that Indian technology is not held in high regards just in the West but also in the East.
RedBus by Ibibo Group:
RedBus was once one of the biggest names amongst the Indian startups, no wonder that it was also the subject to one of the largest ever takeovers when its founders Phanindra Sama and Charan Padmaraju decided to sell their stakes in the company for a reported value of $135 million. RedBus sells in an average a million tickets a month, has a net sale volume of over 800 crores and is rising like hot air, up. No wonder one of the biggest names in travel, the Ibibo group, amongst others, were interested in the company not to come in and change anything, in fact they have left RedBus just the way it was, they came in just to derive profits from it. This shows the a certain amount of faith in Indian entrepreneurship.
Bitzer by Oracle
In November of 2013 Oracle entered the BYOD(bring your own device) movement with its acquisition of the 999 day old startup from Bangalore Bitzer Mobile. Bitzer was one of the few companies worldwide that allow companies to provide their employees corporate data and applications on their mobile devices without compromising on the integrity of their security. Oracle had long been a major player in the field of computer technology however when it came to the ever growing market of mobile technology, its presence was more than limited. Bitzer is an attempt to change just that. However the deal came fast on the heel of IBM acquiring Fiberlink,a US company in the same field as Bitzer. Bitzer had been able to raise over $7 million from its two main investors along with some debt funding. Although the financials of the deal are not known, it is not hard to imagine an eight figure sum.
Little Eye Labs by Facebook
This is probably one of the most talked about acquisitions in the Indian startup market. When a popular company like Facebook acquires its first asset from India, it is quite understandable why is it so. Facebook in its short lifespan has been a galloper when it comes to mergers and acquisitions. All in all it has spent close to $2 billion over the last 8 eight years since its inception on a total of 43 acquisitions including a mammoth deal to acquire Instagram for over a billion dollars. Little Eye Labs was the 42nd acquisition by facebook and first from India. The deal was over $9 million with some reports suggesting it was close to $15 million. Little Eye Labs helped developers measure, analyze and optimize their app’s performance. After the deal the entire team of Little Eye Labs moved to California to join with their new team at facebook.
Imperium by Google
This deal came just 15 days after the news of the Little Eye Labs and Facebook deal hit the press. Google seemed to be playing the catch up act, with its first acquisition in India after 141 abroad. Yes, that is true, Imperium was Google’s first ever Indian acquisition and 142nd overall acquisition. Imperium was one of the leading Indian companies in the field of cyber security. It helped fast growing websites to tackle criminals and miscrants. Although it is not clear whether the deal happened due to Imperium’s innovative technology or for its talented staff, but just like the case of Little Eye Labs deal, the entire team of Imperium will be joining Google’s security team.
India is in many ways new to the startup ecosystem, much behind the likes of USA and China. There is now however a better hope for a better future than there was in the past. Indian companies are now looking to open their wings wider and more and more investors and companies are looking to take a leap of faith with startups. At the same time the recognition from abroad for the work being done in the country in the field of startup is quite commendable. The road ahead is long but we are now better equipped to succeed in it. Indian startups are ready to take on the world and make India into a more prosperous country, the land of opportunities and the heart of innovation. The growing trend in acquisitions of our startups is a proof of just that.