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January 19, 2019
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M&A

Smartsheet acquires Slope to help creatives collaborate

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Smartsheet, the project management and collaboration tool that went public last April, announced the acquisition of Seattle-based TernPro, Inc., makers of Slope, a collaboration tool designed for sharing creative assets.

The companies did not share the acquisition price.

Bringing Slope into the fold will enable Smartsheet users to share assets like video and photos natively inside the application, and also brings the ability to annotate, comment or approve these assets. Smartsheet sees this native integration through a broad enterprise lens. It might be HR sharing training videos, marketing sharing product photos or construction company employees inspecting a site and sharing photos of a code violation, complete with annotations to point out the problem.

Alan Lepofsky, an analyst at Constellation Research, who specializes in collaboration tools in the enterprise sees this as a significant enhancement to the product. “Smartsheet’s focus is on being more than just project management, but instead helping coordinate end-to-end business processes. Slope is going to allow content to become more of a native part of those processes, rather than people having to switch context to another tool,” he explained.

That last point is particularly important as today’s collaboration tools, whether Slack or Microsoft Teams or any other similar tool, have been working hard to provide that kind of integration to keep people focused on the task at hand without having to switch applications.

Mike Gotta, a long-time analyst at Gartner, says collaboration that happens within the flow of work can help make employees more productive, but being able to build specific use cases is even more critical. “The collaboration space remains open for innovation and new ways to addressing old challenges. For organizations though, the trick is how to create a collaboration portfolio that balances broad-based foundational investments with the more domain-specific or situational scenarios they might have where this type of use-case driven collaboration can make more sense,” Gotta told TechCrunch.

That is precisely what Smartsheet is trying to achieve with this purchase, giving them the ability to incorporate workflows involving creative assets, whether that’s including all of the documents required to onboard a new employee or a training workflow that includes learning objectives, lesson plans, photos, videos and so forth.

Smartsheet, which launched in 2005, raised over $113 million before going public last April. The company’s stock price has held up, gaining ground in a volatile stock market. It sits above its launch price of $19.50, closing at $25.24 yesterday.

Slope was founded in 2014 and has raised $1.4 million, according to Crunchbase data. Customers include Microsoft, CBS Sports and the Oakland Athletics baseball team. The company’s employees, including co-founders Dan Bloom and Brian Boschè have already joined SmartSheet.

News Source = techcrunch.com

To automate bigger stores than Amazon, Standard Cognition buys Explorer.ai

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Standard Cognition helps retail stores stand up to Jeff Bezos’ juggernaut. The $50 million-funded autonomous checkout startup is racing to equip bigger shops with scanless payment technology that lets customers walk out the door without ever stopping at a cashier. While Amazon Go opens its own 2,000 square foot boutiques, Standard Cognition is working on outfitting 20,000 square foot and larger drug stores and grocers. That led Standard Cognition to make its first acquisition, Explorer.ai.

Why would an automated checkout company acquire a self-driving car startup? Because whether you’re tracking shoppers or pedestrians, you need sophisticated maps of the real world. The more accurate the machine vision is, the larger the store you can equip. And since Standard Cognition uses ceiling-based cameras instead of putting them on every shelf like Amazon, it’s much cheaper to keep eyes on a bigger space.

Standard Cognition is only just over a year old, but with the backing of Y Combinator, Alexis Ohanian and Garry Tan’s Initialized Capital, and a fast-moving team of seven co-founders, it believes it can outmaneuver Amazon. That means doing whatever it can to leap forward. Standard Cognition already had in-house mapping technology, but Explorer.ai’s team and tech could accelerate its quest to bring even 100,000 sq ft big box supercenters into the automated checkout age.

“It’s the wild west — applying cutting-edge, state-of-the-art machine learning research that’s hot off the press. We read papers then implement it weeks after it’s published, putting the ideas out into the wild and making them production-worthy — taking it from state-of-the-art to dumb machines you can kick and they won’t fall over.” says Standard Cognition co-founder and CEO Jordan Fisher. “It’s no easy task and the exactness we’re going to require will only increase. Having a world-class team of engineers and researchers that can build the next generation version of our mapping is why we’re so excited to have the team joining us.”

From AV To AC

Explorer.ai is was founded in 2017 too, and its acquisition so soon is a testament to how hot the autonomous driving and checkout markets are. Akshay Goel, Nagasrikanth Kallakuri, and Tushar Dadlani noticed self-driving vehicle startups were all trying to generate their own maps. They cobbled together data from several providers, built maps specifically for different purposes, and soon had fellow startups trying to throw money at them. They raised just under $1 million from Story Ventures, early Facebook engineer Nick Heyman and more, growing the team to seven employees.

Explorer.ai’s co-founders

 

But eventually Explorer.ai realized the bigger players were too cautious to rely on outside maps and it could be years before they’d be comfortable with the idea. “Our view is it would take quite a while to become a commercial success in mapping for autonomous vehicles” Goel tells me. “Most of the companies we were working with in partnerships tried to acquire us from an early stage. Should we fundraise more or start looking at the acquisition process?” the team asked itself as its cash dwindled.

Explorer.ai got a few terms sheets for funding, but weren’t sure they’d be able to go to market fast enough. The founders shopped the startup around “to pretty much everyone” Goel says, though they refused to name names when I asked if that included natural acquirers like Uber and Google’s Waymo. But then they took a left turn into retail. “What we saw was that essentially since autonomous checkout has a lot fewer safety issues, [Standard Cognition] could go to market much faster, and mapping had a large impact on autonomous checkout.”

The two companies declined to disclose financial terms of the deal, but Fisher tells me “We can definitely say it was a competitive process and we’re excited that we could win the hearts and minds of the Explorer team.” They’ll join Standard Cognition’s 40-plus employees as the work on pilots for US and Japanese retail locations. Goel adds that “the investors, founders, and team are happy”, implying the payout more than returned the money it’d raised.

Explorer.ai made self-driving car maps before joining Standard Cognition

The big question Standard Cognition’s customers are asking are whether autonomous checkout is cost-effective, simple for customers to understand, and won’t let shoplifters destroy their margins. That means minimizing installation fees, perfecting onboarding and instruction, and recognizing the difference between someone putting an item back on the shelf versus into their jacket. The startup believes that done right, human cashiers can be repurposed as concierges that help customers find what they’re looking for and buy more without having to stand in line.

Standard Cognition co-founder and CEO Jordan Fisher

How do you make this a bulletproof, reproducible system that works as well as a till in a grocery store that no one worries about breaking?” is the challenge Fisher and his new compatriots must solve. “Amazon is pursuing what we call as shelf-based approach with sensors every few inches on every shelf. What’s not great is the expense, the complexity of the electrical and compute systems . . . this is why you’re seeing autonomous checkout applied to Amazon Go and not larger Whole Foods stores. Not from a lack of desire from Amazon, but because it’s not technologically tenable with the approach that they’re taking. I’m confident they’ll tackle that challenge in the next few years but today they’re limited by their technology.”

And so Standard Cognition is pushing as fast as it can build a lead and brand by giving independent retail stores and chains the firepower to fight off Amazon. Standard Cognition will also have to outcompete fellow autonomous checkout startups like ex-Pandora CTO Will Glaser’s Grabango, which announced it’d raised $12 million today. Grabango now has signed deals with four U.S. retail chains up to 25,000 sq ft in size and has 37 employees. There’s also fellow Y Combinator startup Inokyo with a pop-up shop in Mountain View; and Trigo Vision that has a deal with an israeli grocery chain for more than 200 stores.

“I wasn’t thinking we’d do any acquisitions a month ago” Fisher reveals. “Our goal is not just to deliver autonomous checkout to the world but to do it phenomenally quickly. We’re at the beginning of a space race. Two to three years from now, I think this will be potentially as crowded as autonomous vehicles. We’re in the lead today but that’s not enough for us. We need to be light-years ahead to capture as much of the market as we want. [With the Explorer.ai acquisition] how many days does this advance us? How much further along on our roadmap for world domination does this bring us? When we sat down, it was tangible, the real progression of the roadmap.”

News Source = techcrunch.com

These 10 enterprise M&A deals totaled over $87 billion this year

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M&A activity was brisk in the enterprise market this year, with 10 high-profile deals totaling almost $88 billion. Companies were opening up their wallets and pouring money into mega acquisitions. It’s worth noting that the $88 billion figure doesn’t include Dell paying investors more than $23 billion for VMware tracking stock to take the company public again or several other deals of over a billion dollars that didn’t make our list.

Last year’s big deals included Intel buying MobileEye for $15 billion and Cisco getting AppDynamics for $3.7 billion, but there were not as many big ones. Adobe, which made two large acquisitions this year, was mostly quiet last year, only making a minor purchase. Salesforce too was mostly quiet in 2017, only buying a digital creative agency, after an active 2016. SAP also made only one purchase in 2017, paying $350 million for Gigya. Microsoft was active buying nine companies, but these were primarily minor. Perhaps everyone was saving their pennies for 2018.

This year, by contrast, was go big or go home, and we saw action across the board from the usual suspects. Large companies looking to change their fortunes or grow their markets went shopping and came home with some expensive trinkets for their collections. Some of the deals are still waiting to pass regulatory hurdles and won’t be closing until 2019. Regardless, it’s too soon to judge whether these big-bucks ventures will pay the dividends that their buyers hope, or if they end up being M&A dust in the wind.

IBM acquires Red Hat for $34 billion

By far the biggest and splashiest deal of the year goes to IBM, which bet the farm to acquire Red Hat for a staggering $34 billion. IBM sees this acquisition as a way to build out its hybrid cloud business. It’s a huge bet and one that could determine the success of Big Blue as an organization in the coming years.

Broadcom nets CA Technologies for $18.5 billion

This deal was unexpected, as Broadcom, a chip maker, spent the second largest amount of money in a year of big spending. What Broadcom got for its many billions was an old-school IT management and software solutions provider. Perhaps Broadcom felt it needed to branch out beyond pure chip making, and CA offered a way to do it, albeit a rather expensive one.

SAP buys Qualtrics for $8 billion

While not anywhere close to the money IBM or Broadcom spent, SAP went out and nabbed Qualtrics last month just before the company was about to IPO, still paying a healthy $8 billion. The company believes that the new company could help build a bridge between SAP operational data inside its back-end ERP systems and Qualtrics customer data on the front end. Time will tell if they are right.

Microsoft gets GitHub for $7.5 billion

In June, Microsoft swooped in and bought GitHub, giving it a key developer code repository. It was a lot of money to pay, and Diane Greene expressed regret that Google hadn’t been able to get it. That’s because cloud companies are working hard to win developer hearts and minds. Microsoft has a chance to push GitHub users toward its products, but it has to tread carefully because they will balk if Microsoft goes too far.

Salesforce snares MuleSoft for $6.5 billion

Salesforce wasn’t about to be left out of the party in 2018 and in March, the CRM giant announced it was buying API integration vendor Mulesoft for a cool $6.5 billion. It was a big deal for Salesforce, which tends to be acquisitive, but typically on smaller deals. This one was a key purchase though because it gives the company the ability to access data wherever it lives, on premises or in the cloud, and that could be key for them moving forward.

Adobe snags Marketo for $4.75 billion

Adobe has built a strong company primarily on the strength of its Creative Cloud, but it has been trying to generate more revenue on the marketing side of the business. To that end, it acquired Marketo for $4.75 billion and immediately boosted its marketing business, especially when combined with the $1.68 billion Magento purchase earlier in the year.

SAP acquires CallidusCloud for $2.4 billion

SAP doesn’t do as many acquisitions as some of its fellow large tech companies mentioned here, but this year it did two. Not only did it buy Qualtrics for $8 billion, it also grabbed CallidusCloud for $2.4 billion. SAP is best known for managing back-office components with its ERP software, but this adds a cloud-based, front-office sales process piece to the mix.

Cisco grabs Duo Security for $2.35 billion

Cisco has been hard at work buying up a variety of software services over the years, and this year it added to its security portfolio when it acquired Duo Security for $2.35 billion. The Michigan-based company helps companies secure applications using their own mobile devices and could be a key part of the Cisco security strategy moving forward.

Twilio buys SendGrid for $2 billion

Twilio got into the act this year too. While not in the same league as the other large tech companies on this list, it saw a piece it felt would enhance its product set and it was willing to spend big to get it. Twilio, which made its name as a communications API company, saw a kindred spirit in SendGrid, spending $2 billion to get the API-based email service.

Vista snares Apttio for $1.94 billion

Vista Equity Partners is the only private equity firm on the list, but it’s one with an appetite for enterprise technology. With Apttio, it gets a company that can help companies understand their cloud assets alongside their on-prem ones. The company had been public before Vista bought it for $1.94 billion last month.

News Source = techcrunch.com

Trello acquires Butler to add power of automation

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Trello, the organizational tool owned by Atlassian, announced an acquisition of its very own this morning when it bought Butler for an undisclosed amount.

What Butler brings to Trello is the power of automation, stringing together a bunch of commands to make something complex happen automatically. As Trello’s Michael Pryor pointed out in a blog post announcing the acquisition, we are used to tools like IFTTT, Zapier and Apple Shortcuts, and this will bring a similar type of functionality directly into Trello.

Screenshot: Trello

“Over the years, teams have discovered that by automating processes on Trello boards with the Butler Power-Up, they could spend more time on important tasks and be more productive. Butler helps teams codify business rules and processes, taking something that might take ten steps to accomplish and automating it into one click.” Pryor wrote.

This means that Trello can be more than a static organizational tool. Instead, it can move into the realm of light-weight business process automation. For example, this could allow you to move an item from your To Do board to your Doing board automatically based on dates, or to share tasks with appropriate teams as a project moves through its lifecycle, saving a bunch of manual steps that tend to add up.

The company indicated that it will be incorporating the Alfred’s capabilities directly into Trello in the coming months. It will make it available to all level of users including the free tier, but they promise more advanced functionality for Business and Enterprise customers when the integration is complete. Pryor also suggested that more automation could be coming to Trello. “Butler is Trello’s first step down this road, enabling every user to automate pieces of their Trello workflow to save time, stay organized and get more done.”

Atlassian bought Trello in 2017 for $425 million, but this acquisition indicates it is functioning quasi-independently as part of the Atlassian family.

News Source = techcrunch.com

Language learning app Babbel sold 1M US subscriptions this year, moves into language travel

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In the world of online language learning, there are basically two heavyweights: Duolingo and Babbel. Duolingo is betting on a freemium model and a strong focus on using algorithms to help you learn better, while Berlin-based Babbel is a paid service that employs hundreds of teachers. As Babbel co-founder and CEO Markus Witte announced at TechCrunch Disrupt Berlin today, his company is now moving into a new area of language learning with the launch of a language travel marketplace. The company also today announced that it now has over 1 million paying users in the United States.

This new service, which is scheduled to go live next year, is the result of the previously undisclosed acquisition of a Lingo Ventura, a Berlin-based startup that partners with international language schools and local providers to offer a language travel booking platform. As Witte told me ahead of today’s announcement, Lingo Ventura already had connections with 200 language schools in 30 countries. The company never quite managed to make a dent in this market, which has traditionally been quite fragmented.

Witte believes that Babbel, thanks to its existing user base, will be able to turn this into a profitable business, though. “There is a lot of potential here because the current market is not very transparent,” Witte told me. “In Europe, our brand is so well-known now that we are the first stop for learning languages.” And that brand awareness will surely help drive interest in this new platform. The person who uses the company’s app has, after all, already shown interest in learning languages and a willingness to pay for that.

While language travel is quite popular in Europe, it remains a bit of a foreign concept in the United States and few people specifically travel abroad to learn a language. This isn’t a small market, though. In Germany alone, market revenue was about €220 million in 2017, and the various companies that play in this space booked about 150,000 travel bookings last year.

Unsurprisingly, Babbel will first focus its marketing efforts for its yet-to-be-named travel marketplace (I think Babbel Travel is a safe bet) on Europe. The platform, however, is global, and Babbel isn’t going to stop anybody from booking through its platform, of course.

As far as the U.S. language travel market is concerned, though, Babbel expects that it’ll be able to pull in some customers there, too. “It’s not zero,” the company’s U.S. CEO Julie Hansen told me when I asked her about that market. “I think in due course, we’ll discover if there’s a place for us. In a way, you can serve a market better that is so fragmented and ill-defined.” North America in general has generated quite a bit of growth for Babbel recently, especially since it appointed Hansen as a CEO there, though it remains to be seen if travel will become a major revenue source for the company there.

No matter in which geography it will operate, though, Babbel will work with partners, and not run its own programs. “That was a strategic decision on our part,” said Witte. “We want to work with partners, and if we make acquisitions, those are almost always about building bridges to our partners.”

News Source = techcrunch.com

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