Startups Became Hot Picks For Big Corporates

Corporates acquired startups mainly to expand its product portfolio and learn and incorporate new age tools that will provide a strong foot in digitization

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The year 2020 will go down in the history books claiming multiple lives, overworked medical professionals, debatable government decisions, vaccine hopes, empty sports stadium, tumbling economy, high unemployment rate and so on. When it comes to business, the pandemic has been ruthless. Pandemic was just like a category 5 cyclone bolting at a high speed and the businesses, majorly startups, were like localities situated in the way of the cyclone. For months, manufacturing sites remained shut, trucks once carrying manufactured products remained parked. 

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While big companies had the option to fall back on cash reserves to tide over these unprecedented times, the majority of startups crippled, as they relied on investor’s money and didn’t have enough cash runaways. It is during these times, a lot of corporates saw the opportunity to acquire startups for two reasons: To expand its product portfolio and to learn and incorporate new-age tools that will help in digitization.

As the year comes to an end, we look at some of the biggest acquisitions of startups by big corporates.

Titan Acquires Hug Innovations

Indian leading watchmaker Titan at the beginning of the year acquired Hyderabad-based wearable and Internet-of-Things (IoT) platform startup HUG Innovations. The startup was founded in 2012 by Raj Nevarati to address the women’s safety post the Nirbhaya incident. The startup manufactured smart watches embedded with safety features in collaboration with Foxconn and fitness bands, for a customer base of 30,000 people.

Though the amount of the acquisition was never disclosed, Titan acquired the startup to expand its tech-enabled wearable items. According to S. Ravi Kant, chief executive of Titan, the company is the fifth biggest watchmaker in the world which has sold over 17 million time pieces in 2019 and dominating 50 per cent watches market share in this country.

Google Buys Appsheet

Tech giant Google earlier this year acquired a no-code application development platform Appsheet at an undisclosed amount early this year. Founded in 2012 by Praveen Seshadri had raised over $17 million on a $60 million valuation according to Pitchbook. The startup provides a no-code application development platform which is widely used by a number of enterprises across a variety of industries.

“With this acquisition, customers will be able to develop richer applications at scale that leverage not only Google Sheets and Forms which are already popular with customers, but other top Google technologies like Android, Maps and Google Analytics. In addition, AppSheet customers can continue to integrate with a number of cloud-hosted data sources including Salesforce, Dropbox, AWS DynamoDB and MySQL,” Google had said in a press release.

Post the acquisition, Seshadri along with his team joined Google Cloud and continued running its service.

Infosys Acquires US-based Simplus

India’s second largest software exporting firm Infosys in February announced the acquisition of Simplus, a Salesforce platinum partner. The Bengaluru-headquartered company said it closed the deal at $250 million.According to Infosys, Simplus is considered as a leader and advisor in cloud consulting, implementation, data integration, change management, and training services for Salesforce CPQ and billing application. The company with this acquisition wishes to enhance its end-to-end Salesforce enterprise cloud solutions. Later in 2018, the company had also acquired Fluido.

Infosys has also acquired another US-based company Kaleidoscope Innovation for $42 million in September this year.

Marico Expands Its Men’s Grooming Lineup; Buys Beardo

Major fast moving major consumer goods (FMCG) in July acquired Beardo, a men’s grooming startup founded in 2017. Marico in 2018 had bought 45 per cent stake in the Ahmedabad-based startup founded by Asutosh Valani and Priyank Shah to consolidate its presence in the men’s grooming line up.

Beardo is well known among young men for its beard oil, hair serum, face washes and hair combs.

RG-Sanjiv Goenka Group’s Move Into Digital News Platform

The RG-Sanjiv Goenka Group in July this year announced its acquiring a majority stake of 51 per cent in a newly formed digital news platform Editorji.

The move marked the group’s first entry into the digital media space. Founded by former chief executive officer of NDTV, Vikram Chandra in 2018, Editorji from the beginning has relied on video storytelling and competes against major online emerging digital news platforms. Though the transaction amount was undisclosed, Chandra said that as a part of RPSG group along with support of existing investors such as Airtel and HT, the news platform is well-positioned to take advantage of the ongoing digital revolution. The news platform produces news in Hindi and English through audio, video, and texts medium.

SpiceJet Takes Travenues Under Its Wings

Domestic air carrier SpiceJet in July has acqui-hired team and technology of Bengaluru-based ecommerce-based airline company Travenues, a wholly owned subsidiary of Ixigo. This deal will help SpiceJet to strengthen its e-commerce platform. As a part of the deal, the Travenues technology team will join SpiceJet and the airline will absorb Travenues' airline technology and commerce platform that specialises with its deep tech advancements in mobile apps, cross-selling, payments, and others.

Reliance Claws Into E-commerce

If a company that has founded its space in most of the days this year in the business column, it has to Reliance Industries Limited (RIL) led by chairman Mukesh Ambani. The company has not only attracted a plethora of investments in billions from marque foreign investors for both its digital platform, Jio Platform and retail arm RRVL, but also has acquired two popular startups to consolidate its presence in the e-commerce segment, where it is locking horns with Amazon and Walmart owned Flipkart.

In August, RIL’s subsidiary Reliance Retail Ventures Limited (RRVL) forayed into the growing pharmaceutical and healthcare sector by acquiring a majority equity stake in Chennai-based Vitalic Health Pvt. Ltd and its subsidiaries for approximately INR 620 crore. This investment will give Reliance 60 per cent holding in the equity share capital of Vitalic and 100 per cent direct equity ownership of its subsidiaries Tresara Health Pvt. Limited, Netmeds Market Place Limited and Dadha Pharma Distribution Pvt Limited.

The move also comes days after e-commerce giant Amazon launched its online drug sales  ‘Amazon Pharmacy’ in Bengaluru and will expand in other parts of the country.

Later, the company went on to buy 96 per cent stake of an online furniture startup Urban Ladder at an exchange of INR 182 crore. RRVL has further mentioned that it has an option to buy the remaining stake and is willing to invest INR 75 crore which is expected to be completed by 2023.

NSE Academy Picks Majority Stake in TalentSprint

National Stock Exchange (NSE) Ltd's wholly-owned subsidiary NSE Academy last month bought a majority stake in edtech platform TalentSprint. The Hyderabad-based startup provides advanced certification programmes in emerging and deep technologies to professionals using a hybrid online/onsite mode. The startup provides courses on artificial intelligence, blockchain, machine learning, fintech, and other advanced topics. NSE’s managing director and CEO Vikram Limaye had said that it is important to add new and emerging technologies in the education space and TalentSprint’s vision and offering complement their growth ambitions.