Google has struck a multimillion pound investment deal with the e-commerce fulfilment and logistics business which demerged from the online beauty and nutrition brand-owner THG earlier this year.
Sky News has learnt that dozens of shareholders in THG Ingenuity were notified this week that the Alphabet-owned internet behemoth had agreed to invest in it through a structured equity deal.
Sources said the investment was in the form of a convertible instrument which could eventually lead to Google holding a small direct equity stake in THG Ingenuity at a valuation of $1bn (£749m) or more.
The investment forms part of a broader partnership between Google Cloud and THG Ingenuity – announced on Wednesday – aimed at combining the US company’s generative AI and data analytics products with the logistics capabilities of the Manchester-based business.
According to a statement issued earlier this week, the collaboration will include listing THG Ingenuity’s services on the Google Cloud marketplace, developing new products through the use of Google Cloud’s Vertex AI and Gemini platforms, and migrating THG Ingenuity’s digital infrastructure onto Google Cloud.
“By combining Google Cloud’s AI and data expertise with THG Ingenuity’s global commerce and fulfilment capabilities, we are enabling brands to modernise, innovate and create exceptional customer experiences at scale,” said Maureen Costello, vice-president, UK, Ireland and Sub-Saharan Africa at Google Cloud.
The announcement about the two companies’ collaboration did not disclose the agreement about the structured equity deal.
The $1bn valuation attributed to THG Ingenuity by Google’s investment is understood to represent a one times revenue multiple and 15 times earnings multiple for the current financial year.
Co-founded by Matthew Moulding, THG’s chief executive, the company owns beauty and nutrition brands such as LookFantastic, Cult Beauty and MyProtein.
The group has had a turbulent run on the London stock market following its flotation in 2020, although its shares have stabilised more recently, and are up by more than 5% over the last 12 months and roughly 70% since June.
Google and THG Ingenuity both declined to comment on the former’s investment in the latter.
Note: Mark Kleinman is a columnist for City AM, which is owned by THG
