Atlassian to acquire video messaging provider Loom for $975M

Atlassian to acquire video messaging provider Loom for $975M

In a strategic move, Atlassian has announced it's buying video messaging service Loom for $975 million. This price tag comes after a valuation of $1.53 billion for Loom last year. Despite the drop in valuation, Atlassian still views Loom as a key asset, especially considering its 25 million users and more than 5 million monthly video conversations.

Transaction Highlights:

  • Current Valuation: $975 million
  • Previous Valuation: Loom's last known valuation was $1.53 billion
  • Acquirer: Atlassian, the software giant behind Jira and Confluence
  • Target: Loom, a video messaging platform with 25 million users

Atlassian's Strategy with Loom:

Atlassian sees Loom's technology as a valuable extension to its existing products like Jira and Confluence. Mike Cannon-Brookes, Atlassian's co-founder and co-CEO, stated that "async video" would revolutionize team interactions, signaling that Loom could be an integral part of that vision.

Atlassian also mentioned plans to amplify Loom's features with AI-driven capabilities. These would include video transcripts, summary documents, and workflow automation, providing multiple ways for teams to communicate and collaborate more efficiently.

Loom's CEO, Joe Thomas, expressed optimism about the acquisition. He emphasized that by joining forces with Atlassian, the company could expedite its mission to "unleash the potential of every team."

Since launching in 2015, Loom had raised over $200 million. Its Series B in 2019 attracted investment from industry bigwigs like Figma CEO Dylan Field and Instagram co-founders Kevin Systrom and Mike Krieger. Notable VC firms like Sequoia and Kleiner Perkins also backed the venture.

Loom's client list is a testament to its reach, including a range of major companies from various industries like Ford, Tesla, Disney, Walmart, Goldman Sachs, and Amazon.

It should be noted that Loom had to downsize its workforce by 14% last June. This raises questions about its business model, especially its reliance on a free tier.

Atlassian plans to fund the purchase with cash reserves. The transaction is slated to close next year, subject to regulatory approval and other standard conditions.

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