Amazon is one of the world’s most powerful technology companies. The e-commerce giant continues to grow at a breakneck pace. Its online retail business remains as strong as ever. Its cloud computing arm is the undisputed leader in the global cloud market. Amazon’s Prime subscription has also been a massive success with over 100 million subscribers. According to industry analysts, its strategic acquisitions will fuel its future growth. Here we take a look at Amazon’s top 10 biggest acquisitions ever.
Amazon has acquired dozens of companies over the years, including IMDb, Alexa, Zappos, Audible, and many more. The online retail behemoth traditionally makes small-ticket acquisitions. That’s why many were surprised when it announced the purchase of Whole Foods for nearly $14 billion.
Since its inception, the Seattle-based company has made only four acquisitions worth $1 billion or more. According to CBInsights, Amazon has spent more than $20 billion on its top 10 biggest acquisitions.
The deals were in diverse sectors such as media, robotics, computer hardware, healthcare, e-commerce, and smart homes. Jeff Bezos has said that Amazon’s business rests on three pillars: Marketplace, Amazon Prime subscription service, and Amazon Web Services. All of the company’s acquisitions support at least one of the three pillars.
10- LoveFilm International (2011), $312 million
LoveFilm International was a UK-based DVD rental and streaming video service catering to the European markets. It had about two million subscribers when Amazon acquired it for $312 million in 2011. The streaming service was folded into Amazon Prime Video while the DVD rental service was shut down in 2017.
9- Annapurna Labs (2015), $370 million
The e-commerce giant announced in January 2015 the acquisition of Israeli semiconductor startup Annapurna Labs. According to Reuters, the deal was worth $370 million. Amazon purchased Annapurna Labs to make its cloud computing business AWS more cost-effective.
8- Quidsi (2011), $500 million
Amazon purchased all the outstanding shares of Quidsi in 2011 for $500 million, and also assumed the latter’s $45 million debt obligations. It was the Seattle company’s biggest acquisition at the time. Quidsi had a portfolio of e-commerce sites including Diapers.com, BeautyBar.com, and Soap.com. Amazon shut down Quidsi in 2017. Meanwhile, Quidsi co-founder Marc Lore went on to launch Jet.com, which he sold to Walmart for $3.3 billion in 2016.
7- Souq (2017), $580 million
Souq.com gave the US e-tailer access to the rapidly growing Middle-Eastern market. Souq was the biggest e-commerce platform in the Middle-East when Amazon acquired it in 2017. Amazon never officially revealed how much it spent on the deal, but industry estimates suggest the acquisition was worth between $580 million and $650 million.
6- Kiva Systems (2012), $775 million
Prior to acquiring Kiva in 2012, the online retailer had been using Kiva’s robotics and automation systems in its fulfillment centers for years to streamline operations. Amazon’s decision to buy Kiva Systems for $775 million showed how important its automation technology was to the e-commerce giant. Kiva has since been rebranded as Amazon Robotics.
5- Twitch Internactive (2014), $970 million
Twitch has become one of the world’s most popular video game streaming services with a strong community. Jeff Bezos paid nearly a billion dollars for the company in 2014. The Twitch acquisition has turned out to be a masterstroke, especially with the emergence of cloud gaming and game livestreaming. Amazon is preparing to launch its own cloud gaming service.
4- PillPack (2018), $1 billion
With the PillPack acquisition in June 2018, Amazon made its intentions clear that it was planning to disrupt the healthcare industry. It snapped up the online pharmacy for $1 billion. PillPack packages and delivers drugs to consumers. PillPack has the license to deliver prescription drugs in the entire United States. It generated an estimated $100 million revenue last year.
3- Zappos (2009), $1.2 billion
The online shoe retailer was growing at an exponential rate when Amazon agreed to buy it in 2009. Zappos is known for its unique customer experience and culture. The company makes it incredibly easy for customers to order, try, and return items. The all-stock deal was originally valued at $807 million. But by the time the acquisition was completed, it went up to $1.2 billion due to the rise in Amazon share prices.
2- Ring (2018), $1.2 billion
Ring makes smart home security devices such as WiFi-enabled doorbell that lets you monitor your home when you are away. Amazon purchased Ring in 2018 to strengthen its smart home portfolio. The company did not disclose how much it paid for Ring. According to CBInsights, Amazon acquired it for $1.2 billion. Other estimates suggest Ring was worth up to $1.8 billion.
1- Whole Foods (2017), $13.7 billion
This is by far Amazon’s biggest acquisition ever. The online retailer paid a staggering $13.7 billion for Whole Foods. That’s more than 10x what it paid for Ring or Zappos. The Whole Foods acquisition gave Amazon a brick-and-mortar retail infrastructure, which the company has prudently integrated with its e-commerce business, offering 30-minute grocery pickups and Amazon Prime perks. It also strengthens the Seattle company’s presence in the grocery delivery business.