The bigger the business the more it has to lose, and once a company has risen to the top it will work hard to keep its crown. This might explain why the likes of Google, Facebook and Amazon are hoovering up smaller companies and startups at a rate of knots. It might be that a small startup is a threat to a titan's dominance, or that the bigger company just wants to acquire a standout feature, new technological development or simply more customers. Here are some of the huge sums big companies have paid to acquire smaller rivals...
Ipsos is one of the world’s leading market research firms, concentrating on numerous areas such as media, advertising, marketing and social research. Small wonder that US-based social listening firm Synthesio was a natural acquisition for it. Having developed AI technology that detected actionable customer insights from online conversations, Synthesio allowed Ipsos to maintain a competitive edge by gleaning more information from customer data and responses.
Zomato is India’s biggest online food ordering platform and provides images of menus and a website for restaurants and takeaways without an online presence. Its founder Deepinder Goyal had been looking for a way to enter new markets, and so in 2015 acquired the Seattle-based Urbanspoon app. Used extensively in the US, Canada, and Australasia, Urbanspoon was absorbed by the company and redirected customers to Zomato, adding an estimated 53 million users to the Indian giant's customer base, and giving it the ability to compete with other companies such as Yelp.
Lyft is the second-largest transportation network company in the US. Not only does it offer car rides, but scooters and bikes to hire too. In 2016, it bought the London-based augmented reality startup Blue Vision Labs. Specialising in machine perception technology, Blue Vision Labs developed an engine that uses footage from mobile cameras to create detailed maps of areas that are more accurate than GPS systems. Lyft hopes to use this technology to keep up with developments in self-driving vehicles.
Online e-tailer Farfetch grew out of the need for independent retailers of boutique clothes with little ecommerce experience to have an online presence to sell through. After several rounds of funding and expansion, it became a formidable global presence offering a huge choice of stylish garments worldwide. It bought Stadium Goods in 2015 to corner the athleisure wear market and diversify its audience.
As we’ve already seen by its purchase of Blue Vision Labs, Lyft is certainly keen to stay at the forefront of technology and trends. While Lyft already had a considerable presence in the bike-sharing market, electric bike-share company Motivate’s USP was that it operated 80% of flexible, short-term trips in the US. This acquisition not only helped Lyft to dominate the US bike-share market, but also to show it was committed to reflect its customers environmental concerns. It's not the only giant company to invest in electric bikes: Uber has snapped up Jump, while Google's parent company invested heavily in LimeBike.
One of the America’s leading food ordering and delivery platforms, Grubhub bought the Boston-based LevelUp, which connects restaurants with customers via an inbuilt payment platform. Not only did this acquisition increase Grubhub's market share in the area, but because LevelUp has developed an app that provided analytics of customer experiences and loyalty it also provided Grubhub with a useful tool to analyse and improve customer experience, especially against such competition as Deliveroo and Just Eat.
The gargantuan technology corporation Oracle, which is the brainchild of maverick billionaire Larry Ellison (pictured), is renowned for its cloud systems and marketing database software. So it's not a surprise that in April 2018 it decided to snap up Grapeshot, a startup specialising in brand safety for marketers and contextual intelligence solutions, such as ensuring ads which appeared next to a page's content weren't jarring or unintentionally offensive. This meant Oracle could improve the quality of its services to customers.
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The New York Stock Exchange thrives on market technology, and the ability to use software in order to make the most astute investment opportunities and assets is paramount. In 2017 US exchange operator Nasdaq acquired eVestment, a data analytics firm and content provider. This meant it could reduce its reliance on trading volumes, and instead focus on identifying sound investment decisions by using data as part of its new "technology-first" strategy.
Chinese ridesharing app Didi is one of the leading transportation companies in the country with some serious financial clout and big ideas. But it decided that it wanted to look beyond its borders and to expand and compete with Uber and Cabify; in early 2018 Didi acquired Brazil’s largest ridesharing platform, 99app, which served 300 cities in Latin America at the time, for $1 billion (£797m).
This internet pharmacy startup was another acquisition by Amazon, which spied a gap in their portfolio of companies, and sought to offer its customers more services. PillPack is an online pharmacy that delivers prescriptions to customers in pre-made doses. PillPack's approach allied with Amazon's "pick, click and post" business model, and the buy out ensured that the online titan could have access to the huge revenues generated by America's pharmacy and healthcare system.
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The social media platform that needs no introduction was once briefly in danger of being eclipsed by another. While Facebook had many facets to its site, Instagram, co-founded by Kevin Systrom (pictured) in 2010 was arguably the new, cooler kid in town. Facebook had tried and failed to build a presence in the mobile area, but it was only by buying Instagram that it was able to realise this opportunity. The buy out also meant that Facebook could benefit from Instagram's engineering technology and established user base, which had grown to 1 billion in 2018.
Familiar to millions of homeowners and door-to-door salesman, the home-security company Ring that specialised in selling doorbells with cameras attached was Amazon’s second largest acquisition after Whole Foods. The purchase bolstered Amazon's dominance in the Internet of Things (IoT) and home-tech sector when the etailer giant bought it in 2018.
Founded in 1960 in Japan, Recruit is a human resources conglomerate, acting as a jobs board as well as offering other staffing services. Looking to expand, in 2018 Recruit purchased US website Glassdoor, a recruitment site where people can also leave reviews of a company’s culture and view salary figures. Glassdoor is used by more than 32 million people each month, providing information on 770,000 companies across 190 countries worldwide, and so following the purchase Recruit kept the Glassdoor brand name, and developed the website’s extensive reputation.
YouTube’s early output was mainly characterised by home footage of zoo visits and skate videos. However, over time, its output became more focussed and was complemented by the streaming of existing music videos and television skits. Google saw an opportunity to buy YouTube in 2006 and in time created a more cohesive site that rode in tandem with its Google Music services with an emphasis on building advertising revenue.
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Silicon Valley-based multinational technology conglomerate Cisco sits at the vanguard of developing and manufacturing hardware and telecommunications equipment, as well as other high technology systems for computers and the Internet of Things (IoT). In a bid to stay at the forefront of the market, and to develop its software offering, Cisco bought cybersecurity startup Duo Security in 2018. The buy out helped Cisco to improve its security strategy and the safety of its products, as well as its software subscriptions arm.
The transportation giant Uber had taken its ride-sharing app worldwide and was being used in 70 countries. But until recently the market it had yet to enter was the Middle East. The most popular ride-hailing app in this area was Careem and, after nearly a year of stop/start negotiations, Uber completed a buy-out of company for $3.1 billion (£2.4bn) in March 2019. This gave it access to customer base in 15 countries including Saudi Arabia, United Arab Emirates, Egypt, Pakistan and Morocco.
Programmable thermostat company Nest was a boon for homeowners as it allowed them to have more control over their heating using their smartphone, and save energy and money in the process. Google acquired Nest to strengthen its know-how in developing Internet of Things (IoT) technology for the home, paving the way for its Google Home products.
The creative software maker Adobe, which is responsible for the programmes used by the creative and publishing industry, acquired marketing software maker Marketo for more than $4 billion (£3.1bn) in 2009. What might seem like an odd purchase at first makes sense when you realise that it was bought by Adobe to leverage Marketo’s ability to offer new solutions and experiences for customers purchasing Adobe products online.
Founded in 2008, Github was a widely-used, open-source code management system. It allowed developers to produce and alter software projects, and added bug tracking to its functionality. In fact, in 2018, more than 28 million people were using it. So, as one of the biggest software developers on the planet, Microsoft was keen to remain at the forefront of the competition and last year announced that it was buying the company for $7.5bn (£5.9bn) in order to absorb GitHub's technology and audience.
Alibaba is one of the giants of China’s ecommerce, retail, internet and technology sectors. While Ele.me, which translates as "are you hungry?", established itself in the country as a food delivery startup offering meals within 30 minutes. By acquiring Ele.me in 2018, Alibaba has strengthened its foothold in the country’s fastest-growing market: food delivery.
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Founded by Brian Acton and Jan Koum, two former employees of Yahoo, WhatsApp was launched in 2009 as a new type of messaging service that had a secure end-to-end encryption facility in a free-to-download app. Within four years, it announced that 400 million people were using it. Facebook had seen how the future was mobile, and decided to buy the company in 2014. It has turned out to be one of Facebook's largest takeovers to date.
As well as computers and software, IBM also has its own research division, which probes into the latest developments in AI, quantum computing and scientific theories. This division was intrigued by Red Hat, a company with an open-source application to develop technologies more freely by using a reliable, low-maintenance development software. This July IBM purchased Red Hat to bolster its own cloud system and software development gains.