Google just became the largest investor in Care.com, sending the on-demand babysitting service up 18 percent in extended trading.
Google Capital, an investment arm of the internet giant, said on Wednesday that it purchased a $46.4 million stake in Care.com, equal to 17 percent of the website's market value as of the close.
Care.com provides a marketplace that connects caregivers with families. The site claims to serve 11 million families in 16 countries. Google has been a Care.com customer since 2011, providing family care services to its employees, according to the press release.
Under the agreement, Google Capital purchased a new series of convertible preferred stock at an initial conversion price of $10.50, a 21 percent premium to the 30-day average as of June 27. The stock includes a 5.5 percent annual dividend.
Care.com jumped $1.53 to $10 after the announcement, though on light trading volume. As of the close, the stock had gained 38 percent in the past year.
Care.com also said it repurchased 3.7 million shares from Matrix Partners for $8.25 a share and said it used what amounts to a majority of the money from Google to fund the $30.5 million repurchase. Prior to the sale, Matrix owned 4.9 million shares and was the largest shareholder with a 15 percent stake, according to FactSet.