Sydney-based team collaboration software Atlassian has signed a deal to acquire video-messaging platform Loom in a deal worth $975 million, in a bid to benefit off the continued preference for remote working. The deal value is at a discount to Loom’s last-known valuation of $1.53 billion.
Loom’s platform allows users to record a video message simultaneously with on-screen recording and share it across platforms. The app, which currently has 25 million users, has seen significant growth during the pandemic, when video conferencing apps such as Zoom or Microsoft Teams also saw massive adoption.
Founded in 2016, Loom has so far raised $203 million in funding from investors such as Sequoia, Kleiner Perkins and Andreessen Horowitz or a16z. The company was last valued at $1.53 billion, following a $130-million Series C funding round in May 2021, a year which had seen several startups reaching sky-high valuations.
The total deal value of $975 million is inclusive of Loom’s cash balance, the companies said in a media statement. “Total consideration will be comprised of approximately $880 million in cash, and the remainder in Atlassian equity awards, subject to continued vesting provisions,” they said.
Atlassian expects to fund the cash component through its existing cash balance and is likely to close the deal in the third quarter of fiscal year 2024, post regulatory approvals.
The deal is not expected to have an impact on the company’s share repurchase plan, it said. However, it added that it is likely to be slightly dilutive to non-GAAP operating margins in financial years 2024 and 2025.