Thursday’s M&A news once again reminded everyone that it is not 2021 anymore.
Video message launch and one-time unicorn Loom was acquired for $975 million by a collaborative software giant Atlassian. The San Francisco-based startup raised a $130 million Series C in May 2021 at a $1.5 billion valuation, so Atlassian’s price represents a decline of about 35% from that value.
But those were completely different times where enterprise capital financing exploded and few things were hotter than tools that enable higher distant work. Since then, enterprise capital has slowed and distant work has lost some of its luster as staff slowly return to offices.
Less than a 12 months after Series C was announced, Loom joined the ranks a long list of tech startups cutting jobs — lay off 14% of staff.
Still attractive
Nevertheless, Atlassian clearly sees value in Loom’s video solution.
“Video Async is the next evolution of team collaboration, and working with Loom helps distributed teams communicate in a deeply human way.” Mike Cannon-Brookesco-founder and co-founder of Atlassian, said in: statement announcing the deal.
Loom was backed by some big names in the enterprise, including Andreessen Horowitz, Coat, Capital of Sequoia AND Kleiner Perkins. Since its founding in 2016, the startup has raised nearly $204 million.
The deal is unlikely to get up the somewhat sleepy M&A market. According to Crunchbase, only 629 deals involving the acquisition of U.S.-based VC-backed startups were announced in the first nine months of the 12 months data. For comparison, 919 transactions were concluded in the first nine months of last 12 months.
The Loom transaction is expected to shut in the first quarter of next 12 months.