Apigee specialises in API management solutions which will be added to Google cloud as part of the deal.
Google is acquiring API management provider Apigee for approximately $625m, in the company's latest move to enhance its cloud business.
Alphabet’s Google will pay $17.40 a share for Apigee. The transaction, which is applicable to regulatory approvals, is expected to close by the end of this year.
Apigee’s API platform is currently used by several companies such as Walgreens, AT&T, Bechtel, Burberry, First Data and Live Nation.
The company helps businesses across industries become digital businesses. While there are several companies offering API management tools, Google says its focus shifted to Apigee for its supporting features around security, testing support, and usage analytics.
Apigee posted a 34% increase in revenue to $66.9m for the nine months ended 30 April 2016, while also reporting a $32m loss.
At that time, the company noted that it had over 300 customers, an increase of 114 customers since the end of the quarter that ended in April 2015.
Google said it will integrate Apigee's platform with the open-source container management tool Kubernetes.
Google cloud business senior vice president Diane Greene said in a blog post, “The addition of Apigee’s API solutions to Google cloud will accelerate our customers’ move to supporting their businesses with high quality digital interactions.
“Apigee will make it much easier for the requisite APIs to be implemented and published with excellence.”
Apigee Chet Kapoor CEO said: "Google is the open cloud provider committed to delivering new software for not only hybrid-cloud environments, but also for the multi-cloud world.
“With their history of innovation in web and mobile technologies, we believe Google is the partner for companies embarking on digital transformation.”