Atlassian Is All Set To Bloom With Loom Acquisition Worth $975M!

Look who is making waves in the tech sea! It's none other than Atlassian, a software giant renowned for its collaborative tools.

Well, according to its recent announcement, Atlassian has just made a colossal splash in the tech world with a jaw-dropping $975 million acquisition of the innovative video messaging service Loom. This monumental move comes as a strategic shift in Atlassian's vision, aiming to fuse the power of asynchronous video with its existing suite of collaboration tools.

Aiming to fortify its ecosystem, Atlassian has set its sights on Loom's impressive user base of 25 million customers, along with a staggering 5 million monthly video conversations.

Let's see how exactly Atlassian is sea-sing the day with Loom:

Rewind to May 2021, when Loom was basking in the glow of a $1.53 billion valuation after a successful $130 million Series C round. Back then, the world's businesses were still enamored with the vision of a cloud-based future and the prospects seemed brighter than ever.

According to Atlassian's co-founder and co-CEO, Mike Cannon-Brookes, this merger is a tide-turning moment. He believes, "Async video is the next evolution of team collaboration, and teaming up with Loom helps distributed teams communicate in deeply human ways."

He envisions Loom's seamless integration into their platform, particularly in applications like Jira and Confluence. With a nod to the future, Atlassian plans to leverage the power of AI to enhance Loom's offerings. Moreover, the company believes "video transcripts, summaries, documents, and the workflows developed from them, providing multiple ways for teams to connect and collaborate."

TechDogs-"A Screengrab Of Atlassian's Co-founder and Co-CEO, Mike Cannon-Brookes."

Source

In light of the acquisition, Loom's CEO, Joe Thomas, expresses optimism, emphasizing their shared mission to empower effective communication in the workplace. Thomas asserts, "Loom's vision is to empower everyone at work to communicate more effectively wherever they are, and by joining Atlassian, we can accelerate their mission to unleash the potential of every team."

Besides, Atlassian believes Loom will hook users with its video features. Well, the future looks 'buoyant' for Atlassian and Loom but why did Atlassian choose Loom?

Founded in 2015, Loom's journey was marked by substantial fundraising, raising over $200 million along the way. In 2019, their Series B round of $30 million attracted luminaries from the tech world, such as Figma CEO Dylan Field, Front CEO Mathilde Collin, and Instagram co-founders Kevin Systrom and Mike Krieger.

Not to forget the significant backing from renowned venture capital firms such as Sequoia and Kleiner Perkins.

Loom's clientele also read like a list of who's who of global corporations, featuring industry giants such as Ford, Tesla, Disney, Walmart, Goldman Sachs and Amazon, among others. However, despite their impressive credentials, the company's path had not been without its bumps.

The company's growth strategy included offering a free tier, gaining a vast user base. Yet, the Achilles' heel was the imbalance between free and paying users. Signs of turbulence emerged last June when Loom announced a 14% reduction in its workforce, which hinted at internal challenges that needed resolution.

So, now, Atlassian has planned to finance this hefty acquisition using its existing cash reserves, a testimony to its faith in Loom's potential to bolster its suite of collaboration tools. The acquisition is anticipated to be finalized in the third quarter of the upcoming year, subject to customary conditions and regulatory approvals.

Do you think Atlassian's journey into the realm of video collaboration with Loom will help it sail to new heights?

Drop your thoughts in the comments section below!

First published on Mon, Oct 16, 2023

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