We analyse the most recent operations of the giant Amazon in acquiring a business. The company, both through its core business and other divisions such as Amazon Pay and Amazon Web Services, has invested more than $2 billion in 2018.
Amazon: Pioneer in the online sale of goods
Amazon was founded in 1994 and is based in Seattle, Washington. As we all know, we are talking about an e-commerce retailer that was originally created to offer consumers products via the web. Its impact was so high because it was one of the most important first major companies to sell goods over the Internet.
It also allows authors, musicians, filmmakers, app developers and others to publish and sell content through their branded websites. Amazon it also provides Kindle Direct Publishing, an online platform that enables independent authors and publishers to make their books available on the Kindle Store.
In addition, it provides credit card agreements and co-branded advertising services, serves developers and businesses through Amazon Web Services and manufactures and sells electronic devices.
It is estimated that the company revenues of around 208.1 billion dollars per year. In terms of 2019, Amazon could invest as much as $3.2 billion in IT.
Buying companies in 2018
Last year our Corporate Finance experts carried out an analysis of the mergers and acquisitions what Amazon had confirmed from 2015 to 2017. We were able to verify that the company bought 17 companies, the most prominent being the purchase of Whole Foods for 13.7 billion dollars..
In this 2018, however, Amazon has not been as active in corporate acquisitions as on other occasions. We have compiled the four investments confirmed by the US company, which we analyse below:
1. PillPack
Amazon announced on the 28th of June the acquisition of PillPack, an online pharmacy which allows users to buy drugs in pre-made doses. Amazon has not disclosed the terms of the deal, but sources close to the deal say it was for just under $1 billion.
PillPack had reportedly been in talks with Walmart, one of Amazon's big rivals. But Amazon apparently ended up making a higher offer.
This movement points out how the e-health market is heating upand also how Amazon sees it as a key frontier in its attempt to be the reference for any consumer or medical organisation.
2. Ring
Ring was founded in 2012 and is headquartered in Santa Monica, California. It is a domestic security company which offers homeowners a line of security buzzers and outdoor security cameras. Its mission is to reduce crime in neighbourhoods and empower consumers by creating a "ring of security" around homes and communities.
On April 12, the sale of Ring to Amazon was completed. It was a transaction that began on 27 February 2018 and that was valued at USD 1 billion..
Ring's video doorbell has been effective in reducing neighbourhood burglaries by as much as 55%, according to an LAPD pilot programme. Now, with Amazon's goal of offering premium products at non-premium prices, the two companies can help make home peace of mind a reality for more neighbours than ever before.
"Together with Amazon, we will dramatically accelerate our mission by connecting more neighbours around the world and making our security devices and systems more affordable and accessible," said Jamie Siminoff, CEO of Ring.
3. Sqrrl
Sqrrl is a company Big Data analysis which enables organisations to identify and react to unusual activity by automatically discovering hidden connections in their data. With Sqrrl's cyber security solution, users can detect and respond to advanced data breaches associated with cyber espionage activity, insider threats and other types of hard-to-detect attacks.
On 23 January we learned of the purchase of this company by one of the group's companies, Amazon Web Services (AWS). The amounts of the transaction were not disclosed.
Fears about cloud security have long been an existential problem for cloud computing companies, despite the fact that most security experts believe that cloud companies are not able to protect themselves from the threat of security breaches. are much better at placing their workloads within companies such as AWS.
4. Tapzo
Finally, we look at the purchase made by Amazon Pay. Its target was the Indian company Tapzo, All in One" application for high frequency use cases. It aggregates a number of app-based services such as Uber, Ola, the food delivery services Swiggy and Zomato, Book My Show or the bill payment service BillDesk into a single app.
In the immediate aftermath of Google rebranding Tez to Google Pay in India, and Walmart acquiring a majority stake in e-commerce marketplace Flipkart, Amazon also moved into India's growing economy.
On 28 August the operation was confirmed and valued at around $40 million.