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Facebook, Google Buy Two India-based Start-ups

  • Anjana Pasricha

FILE - The Google logo is seen on a window at the company's headquarters in Mountain View, California.

FILE - The Google logo is seen on a window at the company's headquarters in Mountain View, California.

Internet giants Facebook and Google have recently acquired two India-based technology start-up companies. This is expected to give a boost to entrepreneurship in India, home to tens of thousands of software engineers and a thriving information technology industry.

Facebook clinched the deal to acquire Little Eye Labs, a company founded about a year and a half ago by four engineers in Bangalore, in early January. The company builds mobile app analysis tools and is believed to have been bought for $10-15 million. It is the first acquisition by the social media giant of an Indian start-up.

Google has acquired the cyber security firm, Imperium, which has offices in both Bangalore and California. It was founded three years ago to tackle spam, fraud and abuse on the Internet. Media reports put the deal’s value at about $9 million.

Although the two deals are fairly small, they are significant because they have put Indian start-ups on the radar of the global technology companies, which make regular acquisitions of small companies either for the technology they develop or the talent of their founders.

Rutvik Doshi, with venture firm, Inventus Capital Partners in Bangalore, India’s technology hub, thinks the acquisitions are symbolically important.

“Till date none of these large U.S. companies had ever acquired anything in India to write home about. If they both turn out to be successful for these respective companies, they will start looking at India more seriously, in terms of there is more talent, there is more technology, and entrepreneurship happening here. Even though these acquisitions may not be very large, but I think from the symbolic point of view, it is the beginning of a new era,” said Doshi.

Analysts agree that the two deals will give a boost to entrepreneurship in India, where venture capital to fund start ups is not always easy to come by.

India’s IT industry has attracted the country’s brightest minds and Indian software engineers have gained a reputation worldwide, including in Silicon Valley. Most work for big Indian technology companies, but the number of Indian technology start-ups is on the rise.

Rajesh Sawhney, founder of GSF Accelerator, one of the companies which funded Little Eye Labs, said most of the start-ups in India so far have focused on developing products for the home market. However, the recent deals will inspire entrepreneurs and venture capitalists to broaden their vision.

“The time now is to encourage these start ups to start thinking global and that is what [the] internet allows today. We need to encourage our bright, young talent in India to start building products for world markets like Israelis have done or like U.S. start-ups do. Just because we have a large domestic market does not mean we stay focused there,” said Sawhney.

Bangalore’s thriving technology services and outsourcing industry mostly does back office work for Western companies and has put India on the global technology map. It is the success and talent created by that industry which is eyeing the road of entrepreneurship.
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