Monday, June 18, 2018

Deals in Media & Tech - April and May 2018

Another look at recent strategic M&A deals:  I think that these provide a good indication of the future direction of both the large tech companies, and also society.

Mobility - 

This is one of the areas that seems to be moving fastest, both with improvements in autonomous driving (also an AI problem), and new ways to move around cities.

Bikes are the flavour of the month, with at least 3 new dockless schemes now in operation in London, for example, and the new that Uber has bought electric bike company Jumpmay buy the company behind Citi Bike and Ford GoBike, and will be incorporating bikes into its apps in some cities.  In Asia Meituan Dianping has bought MoBike for a staggering $3.4bn making it one of the two biggest Chinese bike sharing companies.  Bikes are clearly going to be very central to how we get around cities in the next few years!

Payments - 

Lots going on - There is a trend towards vertical integration, with Square buying both Weebly, the site that lets people create their own websites, and Zesty, the food delivery app.  Food delivery is growing fast, and this gives Square a stake in the market, while the purchase of Weebly is a good way to meet new companies setting up a commerce platform for the first time.

Elsewhere, Paypal has bought iZettle, the 'European answer to Square' which gives them access to lots of small merchants, including market traders, and also Jetlore, an AI-driven marketing company.  Paypal has so much data on payments, so buying a company that specialises in analysing it seems like a good move.

Food - 

Pet food - Nestle Purina has bought a majority stake in, a direct to consumer pet nutrition company that sells food personalised to the pet.  In a way it's a bit like Unilever's purchase of Dollar Shave Club, because must have lots of knowledge about owners, digital innovation, and selling directly.  Pet food is a massive market - in the UK, for example there are more dogs than babies - and this deal makes lots of sense.

Technology - 

Saving the biggest deal til last, Microsoft has paid $7.5bn for GitHub, the 'library for software' site.  In a way it's a hard deal to work out - GitHub had taken lots of investment, but never really made much money as it's fundamentally a free service for developers.  However it puts Microsoft at the heart of the developer community for the first time in years, and gives them access to a comminity that they want to encourage to develop for all their new platforms.  Lots of intangible benefits here.

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