Google Cloud scoops up Looker for $2.6 billion

Thomas Kurian has only been Google Cloud CEO for a few months, and he's just announced another acquisition at the Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL)subsidiary: Looker. Google is acquiring the analytics platform for a whopping $2.6 billion in an effort to beef up Google Cloud's ability to handle business intelligence and data applications. The deal is expected to close later this year after securing regulatory approval.

That $2.6 billion price tag is a hefty premium compared to the $1.6 billion valuation that Looker fetched six months ago in a private funding round when it raised $103 million. The start-up had raised a total of around $280 million to date, according to Crunchbase. At the time, Looker had just hit a $100 million revenue run rate, TechCrunch reported.

Here's how the acquisition will help Google Cloud compete better with Amazon and Microsoft.

Betting big on big data

Google and Looker had already been working together and had hundreds of common customers, Kurian noted in a blog post announcing the deal. Looker will help Google Cloud Platform (GCP) extend its business analytics in a couple of key ways, including defining metrics in a consistent way across different data sources and giving users an analytics platform to access business intelligence.

"The addition of Looker to Google Cloud will help us offer customers a more complete analytics solution from ingesting data to visualizing results and integrating data and insights into their daily workflows," Kurian wrote. "It will also help us deliver industry specific analytics solutions in our key verticals, whether that's supply chain analytics in retailing; media analytics in entertainment; or healthcare analytics at global scale."

Looker also works with Amazon Web Services (AWS) and Microsoft Azure, and Kurian said the transaction reaffirms Google Cloud's "strategic commitment to multi-cloud."

In a separate blog post, Looker CEO Frank Bien said the combination will give Looker far greater scale to grow even faster. "Joining Google Cloud means our ability to affect this mega change is greatly accelerated," Bien said. "The combination of Google Cloud's BigQuery and associated data infrastructure and Looker's platform for innovative data solutions will reinvent what it means to solve business problems with data at an entirely different scale and value point."

Google is still trying to catch up with AWS and Azure and is investing heavily to do so. Kurian's first acquisition as Google Cloud CEO was cloud migration start-up Alooma, and the search giant announced a massive expansion in February that will include spending billions on new and existing data centers around the U.S. Google CFO Ruth Porat also noted on the last earnings call that the rapid hiring at Google Cloud has been the biggest driver of rising research and development expense.

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This article originally appeared in The Motley Fool.