May
03
2021
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Dell dumps another big asset, moving Boomi to Francisco Partners and TPG for $4B

It’s widely known that Dell has a debt problem left over from its massive acquisition of EMC in 2016, and it seems to be moving this year to eliminate part of it in multi-billion-dollar chunks. The first step was spinning out VMware as a separate company last month, a move expected to net close to $10 billion.

The second step, long expected, finally dropped last night when the company announced it was selling Boomi to a couple of private equity firms for $4 billion. Francisco Partners is joining forces with TPG to make the deal to buy the integration platform.

Boomi is not unlike MuleSoft, a company that Salesforce purchased in 2018 for $6.5 billion, although a bit longer in the tooth. They both help companies with integration problems by creating connections between disparate systems. With so many pieces in place from various acquisitions over the years, it seems like a highly useful asset for Dell to help pull these pieces together and make them work, but the cash is trumping that need.

Providing integration services is a growing requirement as companies look for ways to make better use of data locked in siloed systems. Boomi could help, and that’s one of the primary reasons for the acquisition, according to Francisco executives.

“The ability to integrate and connect data and workflows across any combination of applications or domains is a critical business capability, and we strongly believe that Boomi is well positioned to help companies of all sizes turn data into their most valuable asset,” Francisco CEO Dipanjan Deb and partner Brian Decker said in a statement.

As you would expect, Boomi’s CEO Chris McNabb put a positive spin on the deal about how his new bosses were going to fuel growth for his company. “By partnering with two tier-one investment firms like Francisco Partners and TPG, we can accelerate our ability for our customers to use data to drive competitive advantage. In this next phase of growth, Boomi will be in a position of strength to further advance our innovation and market trajectory while delivering even more value to our customers,” McNabb said in a statement.

All of this may have some truth to it, but the company goes from being part of a large amorphous corporation to getting absorbed in the machinery of two private equity firms. What happens next is hard to say.

The company was founded in 2000, and sold to Dell in 2010. Today, it has 15,000 customer, but Dell’s debt has been well documented, and when you string together a couple of multi-billion-dollar deals as Dell has recently, pretty soon you’re talking real money. While the company has not stated it will explicitly use the proceeds of this deal to pay off debt as it did with the VMware announcement, it stands to reason that this will be the case.

The deal is expected to close later this year, although it will have to pass the typical regulatory scrutiny prior to that.

Apr
28
2021
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Near acquires the location data company formerly known as UberMedia

Data intelligence company Near is announcing the acquisition of another company in the data business — UM.

In some ways, this echoes Near’s acquisition of Teemo last fall. Just as that deal helped Singapore-headquartered Near expand into Europe (with Teemo founder and CEO Benoit Grouchko becoming Near’s chief privacy officer), CEO Anil Mathews said that this new acquisition will help Near build a presence in the United States, turning the company into “a truly global organization,” while also tailoring its product to offer “local flavors” in each country.

The addition of UM’s 60-person team brings Near’s total headcount to around 200, with UM CEO Gladys Kong becoming CEO of Near North America.

At the same time, Mathews suggested that this deal isn’t simply about geography, because the data offered by Near and UM are “very complementary,” allowing both teams to upsell current customers on new offerings. He described Near’s mission as “merging two diverse worlds, the online world and the offline world,” essentially creating a unified profile of consumers for marketers and other businesses. Apparently, UM is particularly strong on the offline side, thanks to its focus on location data.

Near CEO Anil Mathews and UM CEO Gladys Kong

Near CEO Anil Mathews and UM CEO Gladys Kong. Image Credits: Near

“UM has a very strong understanding of places, they’ve mastered their understanding of footfalls and dwell times,” Mathews added. “As a result, most of the use cases where UM is seeing growth — in tourism, retail, real estate — are in industries struggling due to the pandemic, where they’re using data to figure out, ‘How do we come out of the pandemic?’ ”

TechCrunch readers may be more familiar with UM under its old name, UberMedia, which created social apps like Echofon and UberSocial before pivoting its business to ad attribution and location data. Kong said that contrary to her fears, the company had “an amazing 2020” as businesses realized they needed UM’s data (its customers include RAND Corporation, Hawaii Tourism Authority, Columbia University and Yale University).

And the year was capped by connecting with Near and realizing that the two companies have “a lot of synergies.” In fact, Kong recalled that UM’s rebranding last month was partly at Mathews’ suggestion: “He said, ‘Why do you have media in your name when you don’t do media?’ And we realized that’s probably how the world saw us, so we decided to change [our name] to make it clear what we do.”

Founded in 2010, UM raised a total of $34.6 million in funding, according to Crunchbase. The financial terms of the acquisition were not disclosed.

 

Apr
28
2021
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MessageBird acquires SparkPost for $600M using $800M Series C extension

MessageBird, a communications platform out of the Netherlands, had a busy day today, with two huge announcements. For starters, the company got an $800 million extension on its $200 million Series C round announced last October. It then applied $600 million of the extension to buy email marketing platform SparkPost. The company’s C round now totals at least $1 billion.

Let’s start with the acquisition. MessageBird CEO Robert Vis says his company had an email component prior to the acquisition, but the chance to pick up the largest email provider in the world was too good to pass up.

“If you talk about infrastructure, we’re defining largest […] as a matter of interactions, so basically the amount of emails sent. SparkPost sends about 5 trillion emails a year. And the second thing that’s very important to us is to be able to send high-scale emails when it’s really critical,” Vis told me.

With the company in the fold, it enables MessageBird, which has mostly been in Europe and Asia, to get a stronger foothold in the U.S. market. “So this is as much for us about the technology around SparkPost as it actually is for us to have market entry into the United States with a significant workforce instead of having to build that from scratch,” Vis said.

Rich Harris, CEO of SparkPost, sees the deal as a way to expand SparkPost to multiple channels already available on the MessageBird platform and be a much more powerful combination together than it could have been alone.

“By joining forces with MessageBird, we will be able to bring broader, deeper value to all of our customers through any digital communications,” Harris said in a statement.

Vis agrees saying it gives his company the opportunity to upsell other MessageBird services to SparkPost customers. “SparkPost obviously only offers email. We can offer SparkPost customers way more channels. We can offer them texting, Instagram, WhatsApp or Apple Business Chat. So we feel very excited about leveraging them to go sell much more broad messenger products to their customers,” Vis said.

MessageBird announced its $240 million Series C on a $3 billion valuation last October. The company’s whopping $800 million extension brings the round to around $1 billion. It’s worth noting that the round isn’t completely closed yet, so that’s not an official figure.

“The round isn’t completely closed yet as we are still waiting on some of the funds to come in, so we cannot give you 100% final figures on the round, but we can say with confidence that the round will close at $1 billion or slightly higher,” a company spokesperson explained. It is announcing the funding before everything is 100% done due to regulatory requirements around the acquisition.

Eurazeo, Tiger Global, BlackRock and Owl Rock participated in the extension along with Bonnier, Glynn Capital, LGT Lightstone, Longbow, Mousse Partners and NewView Capital, as well as existing investors such as Accel, Atomico (they led the Series A and B rounds) and Y Combinator. The mix is 70% equity and 30% debt, according to the company.

Today’s acquisition comes on the heels of two others just last month, when the company announced it was acquiring video meeting startup 24Sessions and Hull, a synchronization technology startup. The company also acquired Pusher, a push notification company in January, as MessageBird is using its Series C cash to quickly expand the platform.

Apr
28
2021
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Kenya’s Ajua acquires WayaWaya to consolidate consumer experience play in African SMEs

Kenyan consumer experience platform for businesses in Africa, Ajua today announced that it has acquired WayaWaya, a Kenya-based AI and ML messaging and payments company.

WayaWaya’s customers and partners include the likes of I&M Bank, Interswitch and MTN. The company offers a range of services, from digital banking and payment services to financial services APIs and payment bots.

According to Ajua, the acquisition is primarily focused on WayaWaya’s payments bots system known as Janja. The platform, which has customers like Airtel, Ezee Money, Housing Finance Company of Kenya (HF Group), enables borderless banking and payments across apps and social media platforms. Teddy Ogallo, the entrepreneur who founded WayaWaya, joins Ajua as VP of Product APIs and Integrations.

Per Crunchbase, WayaWaya has just raised $75,000. Although the two companies did not disclose the financial details of the acquisition, Ajua is expected to have paid 10 times more than WayaWaya’s total raise.

Ajua, formerly mSurvey, was founded in 2012 by Kenfield Griffith. The company is solving a consumer data problem for African businesses to understand their business better and drive growth.

“There’s a lot of commerce happening on the continent and Ajua wants companies to move from transaction numbers to the customers behind such transaction,” Griffith told TechCrunch. “Imagine if we knew what drove consumer habits for businesses. I mean, that’s a huge exponential curve for African businesses.”

Teddy Ogallo (Founder, WayaWaya) & Kenfield Griffith (CEO, Ajua)

Teddy Ogallo (Founder, WayaWaya) & Kenfield Griffith (CEO, Ajua)

Nigeria’s SME market alone is valued at $220 billion annually. And while businesses, mostly big enterprises, can afford customer communication tools, a large segment of small businesses are being left out. Ajua’s play is to use data and analytics to connect companies with their customers in real time. “We’ve taken what makes enterprise customers successful, and we’re capturing it in a simple format so SMEs can have the same tools,” Griffith added

Since most consumer behavior for these SMEs happens offline, Ajua gives businesses unique USSD codes to receive payments, get feedback and offer discounts to their customers. It is one of the products Ajua has launched over the years for customer feedback at the point of service to businesses that cumulatively have over 45 million customers.

The company’s partners and clients also include Coca-Cola, FBNQuest, GoodLife Pharmacy, Java House, Safaricom, Standard Chartered and Total.

As an intelligent messaging bot, Janja is used by individuals and businesses across WhatsApp, Facebook Messenger and Telegram to automate customer support and make cross-border payments. So, Janja’s integration into Ajua’s product stack will close much of the acquirer’s customer experience loop by automating responses and giving customers what they want, when they want it.

This acquisition comes a month after Ajua announced that it partnered with telecom operator MTN Nigeria to launch a customer management product for Nigerian businesses. The product called MTN EnGauge carries the same features present in Ajua but, in this case, is tailored solely for businesses using the MTN network. The roll-out is expected to generate more data for Ajua’s thousands of users. It will also be upgraded to incorporate Janja and other services.

In hindsight, it appears Ajua could have created a product like Janja in-house due to its vast experience in the consumer experience space. However, the company chose an acquisition and Griffith gave two reasons why — building a similar product would have taken a long time and Ogallo seemed to know Janja’s business and operations so well, it just made sense to get him on board. 

“Teddy was going the same direction we’re going. We just thought to acquire WayaWaya instead and make a really good company out of both products attempting to solve the same problem. To me, it’s all about solving the problem together rather than going alone,” said the CEO. 

On why he accepted the acquisition, Ogallo, who now has a new role, noted that Ajua’s ability to scale customer service and experience and also help businesses was one reason and earned admiration from him. “Seeing how WayaWaya’s technology can complement Ajua’s innovative products and services, and help scale and monetize businesses, is an exciting opportunity for us, and we are happy that our teams will be collaborating to build something unique for the continent,” he added

This is a solid infrastructure play from Ajua coming from a founder who is a massive advocate of acquisition and consolidation. Griffith believes that the two are strategies for a speedier route to new markets and channels in Africa

I think there are lots of ways we can build the ecosystem. There are lots of young talent building stuff, and they don’t have access to capital to get to the next stage. The question is if they want to race to the finish line or take off time and get acquired. I think there’s a huge opportunity in Africa if you want to solve complex problems by acquisition.”

There has been an uptick in local acquisitions in Africa from startups within a single country and between two countries in the past three years. For the former, Nigerian recruitment platform Jobberman’s acquisition of NGCareers last year comes to mind. And there are pan-African instances like Lagos-based hub CcHub’s acquisition of iHub, its Nairobi counterpart; Ethiopian software provider Apposit sell-off to Nigerian fintech Paga; and Johannesburg-based fintech MFS Africa acquiring Uganda’s Beyonic.

The common theme among the acquisitions (and most African acquisitions) is their undisclosed sums. For Ajua, Griffith cited regulatory issues as one reason why the company is keeping the figure under wraps.

Since launching nine years ago, Ajua has raised a total of $3.5 million, according to Crunchbase. Given the nature of this acquisition and partnership with MTN, the company might set sights on another fundraise to scale aggressively into Nigeria (a market it entered in 2019) and other African countries.

Apr
27
2021
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Vista Equity takes minority stake in Canada’s Vena with $242M investment

Vena, a Canadian company focused on the Corporate Performance Management (CPM) software space, has raised $242 million in Series C funding from Vista Equity Partners.

As part of the financing, Vista Equity is taking a minority stake in the company. The round follows $25 million in financing from CIBC Innovation Banking last September, and brings Vena’s total raised since its 2011 inception to over $363 million.

Vena declined to provide any financial metrics or the valuation at which the new capital was raised, saying only that its “consistent growth and…strong customer retention and satisfaction metrics created real demand” as it considered raising its C round.

The company was originally founded as a B2B provider of planning, budgeting and forecasting software. Over time, it’s evolved into what it describes as a “fully cloud-native, corporate performance management platform” that aims to empower finance, operations and business leaders to “Plan to Growtheir businesses. Its customers hail from a variety of industries, including banking, SaaS, manufacturing, healthcare, insurance and higher education. Among its over 900 customers are the Kansas City Chiefs, Coca-Cola Consolidated, World Vision International and ELF Cosmetics.

Vena CEO Hunter Madeley told TechCrunch the latest raise is “mostly an acceleration story for Vena, rather than charting new paths.”

The company plans to use its new funds to build out and enable its go-to-market efforts as well as invest in its product development roadmap. It’s not really looking to enter new markets, considering it’s seeing what it describes as “tremendous demand” in the markets it currently serves directly and through its partner network.

“While we support customers across the globe, we’ll stay focused on growing our North American, U.K. and European business in the near term,” Madeley said.

Vena says it leverages the “flexibility and familiarity” of an Excel interface within its “secure” Complete Planning platform. That platform, it adds, brings people, processes and systems into a single source solution to help organizations automate and streamline finance-led processes, accelerate complex business processes and “connect the dots between departments and plan with the power of unified data.”            

Early backers JMI Equity and Centana Growth Partners will remain active, partnering with Vista “to help support Vena’s continued momentum,” the company said. As part of the raise, Vista Equity Managing Director Kim Eaton and Marc Teillon, senior managing director and co-head of Vista’s Foundation Fund, will join the company’s board.

“The pandemic has emphasized the need for agile financial planning processes as companies respond to quickly-changing market conditions, and Vena is uniquely positioned to help businesses address the challenges required to scale their processes through this pandemic and beyond,” said Eaton in a written statement. 

Vena currently has more than 450 employees across the U.S., Canada and the U.K., up from 393 last year at this time.

Apr
15
2021
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IBM acquires Italy’s myInvenio to integrate process mining directly into its suite of automation tools

Automation has become a big theme in enterprise IT, with organizations using RPA, no-code and low-code tools, and other technology to speed up work and bring more insights and analytics into how they do things every day, and today IBM is announcing an acquisition as it hopes to take on a bigger role in providing those automation services. The IT giant has acquired myInvenio, an Italian startup that builds and operates process mining software.

Process mining is the part of the automation stack that tracks data produced by a company’s software, as well as how the software works, in order to provide guidance on what a company could and should do to improve it. In the case of myInvenio, the company’s approach involves making a “digital twin” of an organization to help track and optimize processes. IBM is interested in how myInvenio’s tools are able to monitor data in areas like sales, procurement, production and accounting to help organizations identify what might be better served with more automation, which it can in turn run using RPA or other tools as needed.

Terms of the deal are not being disclosed. It is not clear if myInvenio had any outside investors (we’ve asked and are awaiting a response). This is the second acquisition IBM has made out of Italy. (The first was in 2014, a company called CrossIdeas that now forms part of the company’s security business.)

IBM and myInvenio are not exactly strangers: The two inked a deal as recently as November 2020 to integrate the Italian startup’s technology into IBM’s bigger automation services business globally.

Dinesh Nirmal, GM of IBM Automation, said in an interview that the reason IBM acquired the company was two-fold. First, it lets IBM integrate the technology more closely into the company’s Cloud Pak for Business Automation, which sits on and is powered by Red Hat OpenShift and has other automation capabilities already embedded within it, specifically robotic process automation (RPA), document processing, workflows and decisions.

Second and perhaps more importantly, it will mean that IBM will not have to tussle for priority for its customers in competition with other solution partners that myInvenio already had. IBM will be the sole provider.

“Partnerships are great but in a partnership you also have the option to partner with others, and when it comes to priority, who decides?” he said. “From the customer perspective, will they work just on our deal, or others first? Now, our customers will get the end result of this… We can bring a single solution to an end user or an enterprise, saying, ‘look you have document processing, RPA, workflow, mining.’ That is the beauty of this and what customers will see.”

He said that IBM currently serves with its automation products customers across a range of verticals, including financial, insurance, healthcare and manufacturing.

Notably, this is not the first acquisition that IBM has made to build out this stack. Last year, it acquired WDG to expand into robotic process automation.

And interestingly, it’s not even the only partnership that IBM has had in process mining. Just earlier this month, it announced a deal with one of the bigger names in the field, Celonis, a German startup valued at $2.5 billion in 2019.

Ironically, at the time, my colleague Ron wondered aloud why IBM wasn’t just buying Celonis outright in that deal. It’s hard to speculate if price was one reason. Remember: We don’t know the terms of this acquisition, but given myInvenio was off the fundraising radar, chances are it’s possibly a little less than Celonis’s price tag.

We’ve asked and IBM has confirmed that it will continue to work with Celonis alongside now offering its own native process mining tools.

“In keeping with IBM’s open approach and $1 billion investment in ecosystem, [Global Business Services, IBM’s enterprise services division] works with a broad range of technologies based on client and market demand, including IBM AI and Automation software,” a spokesperson said in a statement. “Celonis focuses on execution management which supports GBS’ transformation of clients’ business processes through intelligent workflows across industries and domains. Specifically, Celonis has deep connectivity into enterprise systems such as Salesforce, SAP, Workday or ServiceNow, so the Celonis EMS platform helps GBS accelerate clients’ transformations and BPO engagements with these ERP platforms.”

Indeed, at the end of the day, companies that offer services, especially suites of services, are working in environments where they have to be open to customers using their own technology, or bringing in something else.

There may have been another force pushing IBM to bring more of this technology in-house, and that’s wider competitive climate. Earlier this year, SAP acquired another European startup in the process mining space, Signavio, in a deal reportedly worth about $1.2 billion. As more of these companies get snapped up by would-be IBM rivals, and those left standing are working with a plethora of other parties, maybe it was high time for IBM to make sure it had its own horse in the race.

“Through IBM’s planned acquisition of myInvenio, we are revolutionizing the way companies manage their process operations,” said Massimiliano Delsante, CEO, myInvenio, who will be staying on with the deal. “myInvenio’s unique capability to automatically analyze processes and create simulations — what we call a ‘Digital Twin of an Organization’ — is joining with IBM’s AI-powered automation capabilities to better manage process execution. Together we will offer a comprehensive solution for digital process transformation and automation to help enterprises continuously transform insights into action.”

Apr
12
2021
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Microsoft goes all in on healthcare with $19.7B Nuance acquisition

When Microsoft announced it was acquiring Nuance Communications this morning for $19.7 billion, you could be excused for doing a Monday morning double take at the hefty price tag.

That’s surely a lot of money for a company on a $1.4 billion run rate, but Microsoft, which has already partnered with the speech-to-text market leader on several products over the last couple of years, saw a company firmly embedded in healthcare and it decided to go all in.

And $20 billion is certainly all in, even for a company the size of Microsoft. But 2020 forced us to change the way we do business from restaurants to retailers to doctors. In fact, the pandemic in particular changed the way we interact with our medical providers. We learned very quickly that you don’t have to drive to an office, wait in waiting room, then in an exam room, all to see the doctor for a few minutes.

Instead, we can get on the line, have a quick chat and be on our way. It won’t work for every condition of course — there will always be times the physician needs to see you — but for many meetings such as reviewing test results or for talk therapy, telehealth could suffice.

Microsoft CEO Satya Nadella says that Nuance is at the center of this shift, especially with its use of cloud and artificial intelligence, and that’s why the company was willing to pay the amount it did to get it.

“AI is technology’s most important priority, and healthcare is its most urgent application. Together, with our partner ecosystem, we will put advanced AI solutions into the hands of professionals everywhere to drive better decision-making and create more meaningful connections, as we accelerate growth of Microsoft Cloud in Healthcare and Nuance,” Nadella said in a post announcing the deal.

Holger Mueller, an analyst at Constellation Research, says says that may be so, but he believes that Microsoft missed the boat with Cortana and this is about helping the company catch up on a crucial technology. “Nuance will be not only give Microsoft technology help in regards to neural network based speech recognition, but also a massive improvement from vertical capabilities, call center functionality and the MSFT IP position in speech,” he said.

Microsoft sees this deal doubling what was already a considerable total addressable market to nearly $500 billion. While TAMs always tend to run high, that is still a substantial number.

It also fits with Gartner data, which found that by 2022, 75% of healthcare organizations will have a formal cloud strategy in place. The AI component only adds to that number and Nuance brings 10,000 existing customers to Microsoft including some of the biggest healthcare organizations in the world.

Brent Leary, founder and principal analyst at CRM Essentials, says the deal could provide Microsoft with a ton of health data to help feed the underlying machine learning models and make them more accurate over time.

“There is going be a ton of health data being captured by the interactions coming through telemedicine interactions, and this could create a whole new level of health intelligence,” Leary told me.

That of course could drive a lot of privacy concerns where health data is involved, and it will be up to Microsoft, which just experienced a major breach on its Exchange email server products last month, to assure the public that their sensitive health data is being protected.

Leary says that ensuring data privacy is going to be absolutely key to the success of the deal. “The potential this move has is pretty powerful, but it will only be realized if the data and insights that could come from it are protected and secure — not only protected from hackers but also from unethical use. Either could derail what could be a game changing move,” he said.

Microsoft also seemed to recognize that when it wrote, “Nuance and Microsoft will deepen their existing commitments to the extended partner ecosystem, as well as the highest standards of data privacy, security and compliance.”

Kate Leggett, an analyst at Forrester Research thinks healthcare could be just the first step and once Nuance is in the fold, it could go much deeper than that.

“However, the benefit of this acquisition does not stop [with healthcare]. Nuance also offers market-leading customer engagement technologies, with deep expertise and focus in verticals such as financial services. As MSFT evolves their industry editions into other verticals, this acquisition will pay off for other industries. MSFT may also choose to fill in the gaps within their Dynamics solution with Nuance’s customer engagement technologies,” Leggett said.

We are clearly on the edge of a sea change when it comes to how we interact with our medical providers in the future. COVID pushed medicine deeper into the digital realm in 2020 out of simple necessity. It wasn’t safe to go into the office unless absolutely necessary.

The Nuance acquisition, which is expected to close some time later this year, could help Microsoft shift deeper into the market. It could even bring Teams into it as a meeting tool, but it’s all going to depend on the trust level people have with this approach, and it will be up to the company to make sure that both healthcare providers and the people they serve have that.

Apr
12
2021
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Microsoft is acquiring Nuance Communications for $19.7B

Microsoft agreed today to acquire Nuance Communications, a leader in speech to text software, for $19.7 billion. Bloomberg broke the story over the weekend that the two companies were in talks.

In a post announcing the deal, the company said this was about increasing its presence in the healthcare vertical, a place where Nuance has done well in recent years. In fact, the company announced the Microsoft Cloud for Healthcare last year, and this deal is about accelerating its presence there. Nuance’s products in this area include Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting.

“Today’s acquisition announcement represents the latest step in Microsoft’s industry-specific cloud strategy,” the company wrote. The acquisition also builds on several integrations and partnerships the two companies have made in the last couple of years.

The company boasts 10,000 healthcare customers, according to information on the website. Those include AthenaHealth, Johns Hopkins, Mass General Brigham and Cleveland Clinic to name but a few, and it was that customer base that attracted Microsoft to pay the price it did to bring Nuance into the fold.

Nuance CEO Mark Benjamin will remain with the company and report to Scott Guthrie, Microsoft’s EVP in charge of the cloud and AI group.

Nuance has a complex history. It went public in 2000 and began buying speech recognition products, including Dragon Dictate from Lernout Hauspie, in 2001. It merged with a company called ScanSoft in 2005. That company began life as Visioneer, a scanning company, in 1992.

Today, the company has a number of products including Dragon Dictate, a consumer and business text to speech product that dates back to the early 1990s. It’s also involved in speech recognition, chat bots and natural language processing particularly in healthcare and other verticals.

The company has 6,000 employees spread across 27 countries. In its most recent earnings report from November 2020, which was for Q42020, the company reported $352.9 million in revenue compared to $387.6 million in the same period a year prior. That’s not the direction a company wants to go, but it is still a run rate of over $1.4 billion.

At the time of that earnings call, the company also announced it was selling its medical transcription and electronic health record (EHR) Go-Live services to Assured Healthcare Partners and Aeries Technology Group. Company CEO Benjamin said this was about helping the company concentrate on its core speech services.

“With this sale, we will reach an important milestone in our journey towards a more focused strategy of advancing our Conversational AI, natural language understanding and ambient clinical intelligence solutions,” Benjamin said in a statement at the time.

It’s worth noting that Microsoft already has a number speech recognition and chat bot products of its own, including desktop speech to text services in Windows and on Azure, but it took a chance to buy a market leader and go deeper into the healthcare vertical.

The transaction has already been approved by both company boards and Microsoft reports it expects the deal to close by the end of this year, subject to standard regulatory oversight and approval by Nuance shareholders.

This would mark the second largest purchase by Microsoft ever, only surpassed by the $26.2 billion the company paid for LinkedIn in 2016.

Mar
29
2021
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Testing platform Tricentis acquires performance testing service Neotys

If you develop software for a large enterprise company, chances are you’ve heard of Tricentis. If you don’t develop software for a large enterprise company, chances are you haven’t. The software testing company with a focus on modern cloud and enterprise applications was founded in Austria in 2007 and grew from a small consulting firm to a major player in this field, with customers like Allianz, BMW, Starbucks, Deutsche Bank, Toyota and UBS. In 2017, the company raised a $165 million Series B round led by Insight Venture Partners.

Today, Tricentis announced that it has acquired Neotys, a popular performance testing service with a focus on modern enterprise applications and a tests-as-code philosophy. The two companies did not disclose the price of the acquisition. France-based Neotys launched in 2005 and raised about €3 million before the acquisition. Today, it has about 600 customers for its NeoLoad platform. These include BNP Paribas, Dell, Lufthansa, McKesson and TechCrunch’s own corporate parent, Verizon.

As Tricentis CEO Sandeep Johri noted, testing tools were traditionally script-based, which also meant they were very fragile whenever an application changed. Early on, Tricentis introduced a low-code tool that made the automation process both easier and resilient. Now, as even traditional enterprises move to DevOps and release code at a faster speed than ever before, testing is becoming both more important and harder for these companies to implement.

“You have to have automation and you cannot have it be fragile, where it breaks, because then you spend as much time fixing the automation as you do testing the software,” Johri said. “Our core differentiator was the fact that we were a low-code, model-based automation engine. That’s what allowed us to go from $6 million in recurring revenue eight years ago to $200 million this year.”

Tricentis, he added, wants to be the testing platform of choice for large enterprises. “We want to make sure we do everything that a customer would need, from a testing perspective, end to end. Automation, test management, test data, test case design,” he said.

The acquisition of Neotys allows the company to expand this portfolio by adding load and performance testing as well. It’s one thing to do the standard kind of functional testing that Tricentis already did before launching an update, but once an application goes into production, load and performance testing becomes critical as well.

“Before you put it into production — or before you deploy it — you need to make sure that your application not only works as you expect it, you need to make sure that it can handle the workload and that it has acceptable performance,” Johri noted. “That’s where load and performance testing comes in and that’s why we acquired Neotys. We have some capability there, but that was primarily focused on the developers. But we needed something that would allow us to do end-to-end performance testing and load testing.”

The two companies already had an existing partnership and had integrated their tools before the acquisition — and many of its customers were already using both tools, too.

“We are looking forward to joining Tricentis, the industry leader in continuous testing,” said Thibaud Bussière, president and co-founder at Neotys. “Today’s Agile and DevOps teams are looking for ways to be more strategic and eliminate manual tasks and implement automated solutions to work more efficiently and effectively. As part of Tricentis, we’ll be able to eliminate laborious testing tasks to allow teams to focus on high-value analysis and performance engineering.”

NeoLoad will continue to exist as a stand-alone product, but users will likely see deeper integrations with Tricentis’ existing tools over time, include Tricentis Analytics, for example.

Johri tells me that he considers Tricentis one of the “best kept secrets in Silicon Valley” because the company not only started out in Europe (even though its headquarters is now in Silicon Valley) but also because it hasn’t raised a lot of venture rounds over the years. But that’s very much in line with Johri’s philosophy of building a company.

“A lot of Silicon Valley tends to pay attention only when you raise money,” he told me. “I actually think every time you raise money, you’re diluting yourself and everybody else. So if you can succeed without raising too much money, that’s the best thing. We feel pretty good that we have been very capital efficient and now we’re recognized as a leader in the category — which is a huge category with $30 billion spend in the category. So we’re feeling pretty good about it.”

Mar
23
2021
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OneTrust adds ethics to its privacy platform with Convercent acquisition

OneTrust, a late stage privacy platform startup, announced it was adding ethics and compliance to the mix this morning by acquiring Convercent, a company that was built to help build more ethical organizations. The companies did not share the purchase price.

OneTrust just raised $300 million on a fat $5.1 billion valuation at the end of last year, and it’s putting that money to work with this acquisition. Alan Dabbiere, co-chairman at OneTrust sees this acquisition as a way to add a missing component to his company’s growing platform of services.

“Integrating Convercent instantly brings a proven ethics and compliance technology, team, and customer base into the OneTrust, further aligning the Chief Ethics & Compliance Officer strategy alongside privacy, data governance, third-party risk, GRC (governance, risk and compliance), and ESG (environmental, social and governance) to build trust as a competitive advantage,” he said.

Convercent brings 750 customers and 150 employees to the OneTrust team along with its ethics system, which includes a way for employees to report ethical violations to the company and a tool for managing disclosures.

Convercent can also use data to help surface bad behavior before it’s been reported. As CEO Patrick Quinlan explained in a 2018 TechCrunch article:

“Sometimes you have this interactive code of conduct, where there’s a new vice president in a region and suddenly page views on the sexual harassment section of the Code of Conduct have increased 200% in the 90 days after he started. That’s easy, right? There’s a reason that’s happening, and our system will actually tell you what’s happening.”

Quinlan wrote in a company blog post announcing the deal that joining forces with OneTrust will give it the resources to expand its vision.

“As a part of OneTrust, we’ll be combining forces with the leader across privacy, security, data governance, third-party risk, GRC, ESG—and now—ethics and compliance. Our customers will now be able to build centralized programs across these workstreams to make trust a competitive differentiator,” Quinlan wrote.

Convercent was founded in 2012 and has raised over $100 million, according to Pitchbook data. OneTrust was founded in 2016. It has over 8000 customers and 150 employees and has raised $710 million, according to the company.

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