Google Inc is likely to buy Bangalore-based start-up InMobi, the planned acquisition being the US-based Internet search behemoth’s first in India and part of a strategy to counter Facebook’s dominance in advertising on mobile devices. InMobi, which helps companies target phones and mobile devices in their advertising, was launched in 2007 and claims to have over 1 billion users across 200 countries. It counts Japan’s SoftBank, an early backer of China’s Alibaba, and early stage venture capital firm Sherpalo among investors.
Two sources familiar with the talks said Google would soon initiate a technology due diligence of Bengaluru-based InMobi followed by discussions on commercial terms. Although financial specifics are still to be discussed, InMobi had been looking for a valuation of over $2 billion (Rs 12,500 crore) in its discussions with investors for its next round of funding.
One person said exploratory talks between Google and InMobi first started last September, went nowhere and had resumed again. “They are now talking formally, the next step is a technology due diligence,” said this person. “Things were different last year, both for Google and InMobi. While Google was not facing the amount of heat it’s witnessing today from Facebook on mobile, InMobi too was confident of raising another funding comfortably,” this person said, adding that Ram Shriram of Sherpalo Ventures, an early investor in both companies, had played a role in the talks. Both sources requested anonymity because they were not authorised to talk about the deal.