Google is the latest giant company angling to secure more of users’ health information–potentially boding well for healthtech startups looking for an acquirer one day.
Reuters reported this week that Google’s owner, Alphabet, has made an offer to acquire wearable device maker Fitbit. Update: On Friday, Fitbit announced that it has agreed to be acquired by Google for approximately $2.1 billion. The deal is expected to close in 2020. The news comes on the heels of reports last month that Fitbit CEO James Park was exploring a potential sale for his company.
Park and CTO Eric Friedman co-founded the San Francisco-based company in 2007, and proceeded to help pioneer the wearable device industry–which reached a value of $1.6 billion last year, according to a June Research and Markets report. But recently, Reuters noted, the company has been struggling to successfully pivot from fitness trackers to smartwatches, now dominated by Apple and Samsung.
Google’s interest in smartwatches has been well-documented. Last month, Business Insider reported that the company started developing smartwatch offerings as early as 2013–but has still never released one because of a series of internal reorganizations, quality issues, and design struggles. In January, Google spent $40 million to acquire a chunk of smartwatch intellectual property–and members of the team responsible for creating it–from fashion designer and manufacturer Fossil Group.
More broadly, tech giants have spent the past few years snapping up health care data-oriented startups. In June of 2018, Amazon bought online pharmacy, and 2016 Inc. Rising Star, PillPack for near $750 million–and it acquired digital health startup Health Navigator for an undisclosed price just last Wednesday. Apple purchased personal health data company Gliimpse in 2016, sleep sensor maker Beddit in 2017, and asthma monitoring system Tueo Health in 2018, all also for undisclosed prices.
Altogether, the health care industry has seen at least 250 mergers, acquisitions, shareholder spinoffs, and other similar deals per quarter for more than two years, according to PwC’s most recent U.S. Health Services Deals Insights report. The report noted that in the third quarter of 2019 alone, the industry’s deals tallied $19.6 billion, up nearly 18 percent from the same quarter a year ago.
Source: Google to Pay $2.1 Billion for Fitbit, Making It the Latest Giant Ramping Up on Healthtech