Atlassian, one of the most prominent software development companies, has announced its plans to acquire video messaging service Loom for a staggering $975 million. Loom, formerly a unicorn startup with a valuation of $1.53 billion, has seen a change in its fortunes in recent times. Nonetheless, Atlassian recognizes the immense value in Loom, particularly in its expansive customer base of 25 million users and over 5 million monthly video conversations. This acquisition aligns with Atlassian’s vision of enhancing collaboration across its platform, notably its popular tools Jira and Confluence.
Key Takeaway
Atlassian aims to leverage Loom’s asynchronous video capabilities, viewing it as the future of team collaboration. By integrating Loom’s features such as video transcripts, summaries, and workflow tools, Atlassian aims to create multiple avenues for teams to connect and communicate effectively.
Loom’s Potential in the World of Collaboration
Atlassian Co-founder and Co-CEO, Mike Cannon-Brookes, expressed his enthusiasm for the acquisition, emphasizing that asynchronous video represents the next step in team collaboration. By joining forces with Loom, Atlassian aims to enable distributed teams to communicate in more personal and meaningful ways.
The introduction of artificial intelligence (AI) also plays a significant role in this acquisition. Atlassian envisions AI-powered features that enhance collaboration, such as video transcripts, summaries, and document workflows. These innovations will serve as valuable additions to Atlassian’s existing suite of collaboration tools.
Joe Thomas, Loom’s Co-founder and CEO, also conveyed optimism about the acquisition. Thomas highlighted Loom’s mission to empower effective communication in the workplace and expressed confidence that Atlassian’s involvement would expedite the realization of this goal. This sentiment echoes the common belief among acquired CEOs that the combined entities will bring about accelerated growth and enhanced capabilities.
Loom’s Journey and Customer Base
Loom, founded in 2015, has garnered significant attention along the way, raising over $200 million in funding. Notable investors include industry luminaries such as Figma CEO Dylan Field, Front CEO Mathilde Collin, and Instagram co-founders Kevin Systrom and Mike Krieger, as well as venture capital firms Sequoia and Kleiner Perkins.
The company boasts an impressive roster of clients from various industries, including Ford, Tesla, Disney, Walmart, Goldman Sachs, and Amazon, among others. Loom’s ability to attract such notable corporations is a testament to its value proposition within the realm of professional communication and collaboration.
Paving the Way for Future Growth
Despite its successes, Loom faced challenges with its revenue model. Offering a free tier might have contributed to a high number of non-paying users. Last year, the company made the difficult decision to lay off 14% of its workforce, indicating a need to reassess its business strategy.
In terms of the acquisition, Atlassian plans to fund it using available cash reserves, and the transaction is anticipated to conclude in the third quarter of next year, pending regulatory approval.
With this strategic move, Atlassian solidifies its position as a leader in software collaboration, leveraging Loom’s video messaging capabilities to enhance its existing portfolio of tools. The acquisition signifies Atlassian’s commitment to continually evolve and meet the changing needs of distributed teams in an increasingly fast-paced and interconnected work environment.
