Thursday’s M&A news gave everyone yet another reminder this isn’t 2021 anymore.
Video messaging startup and one-time unicorn Loom was bought for $975 million by collaborative software giant Atlassian. The San Francisco-based startup raised a $130 million Series C at a $1.5 billion valuation in May 2021 — so Atlassian’s price represents about a 35% decline from that value.
But that was a very different time, where venture capital funding was exploding and few things were hotter than tools that allow for better remote work. Since then, venture capital has slowed and remote work has lost some luster as workers have slowly crept back into offices.
Just about a year after announcing its Series C, Loom joined the long list of tech startups slashing their workforces — laying off 14% of its staff.
Nevertheless, Atlassian clearly sees value in Loom’s video solution.
“Async video is the next evolution of team collaboration, and teaming up with Loom helps distributed teams communicate in deeply human ways,” Mike Cannon-Brookes, co-founder and co-CEO of Atlassian, said in a statement announcing the deal.
The deal is unlikely to wake up a somewhat sleepy M&A market. Through the first nine months of the year, only 629 deals involving U.S.-based, VC-backed startups being acquired were announced, per Crunchbase data. That compares to 919 deals for the first nine months of last year.
The Loom deal is expected to be completed in the first quarter of next year.
Illustration: Dom Guzman
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