In a strategic move to bolster its team collaboration tools amidst the rising trend of hybrid work, Atlassian has unveiled its plans to acquire Loom, a privately held video messaging platform, for an approximate sum of $975 million.
This acquisition is set to fortify Atlassian’s software suite, integrating Loom’s innovative technology into key collaboration tools like Jira and Confluence, facilitating users in incorporating video seamlessly into their workflows.
Loom, a popular video messaging tool with a user base exceeding 25 million, empowers individuals to communicate effectively through instantly shareable videos. Currently, Loom witnesses the creation of nearly 5 million videos each month by their 200,000 customers.
Atlassian, already serving as the go-to platform for over 260,000 customers including prominent names like NASA, Kiva, Deutsche Bank, and Salesforce, sees this acquisition as a strategic move towards enabling enhanced communication and collaboration.
Atlassian believes that the integration of Loom into Atlassian’s ecosystem will offer various benefits, including engineers visually logging issues in Jira, leaders leveraging videos to connect with employees at scale, sales teams delivering tailored video updates to clients, and HR teams efficiently onboarding new employees through personalized welcome videos.
The integration of Atlassian’s and Loom’s investments in artificial intelligence (AI) will facilitate seamless transitions between video content, transcripts, summaries, documents, and the workflows derived from them, further enhancing user experience.
Loom, backed by prominent investors such as Sequoia, Kleiner Perkins, and a16z, specializes in creating tools that allow users to record their screens, camera, and microphone to create and share videos. The acquisition will be structured with approximately $880 million in cash and the remainder in shares.
The deal is anticipated to be finalized by the quarter ending in March 2024, funded through Atlassian’s existing cash reserves. While acknowledging a dilution of operating margins in fiscal years ending June 2024 and 2025 due to this acquisition, the Australia-based company remains optimistic about the long-term benefits and opportunities it will unlock in the evolving landscape of collaboration and communication tools.