M&A
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IronSource acquires video and playable ad platform Luna Labs
Mobile advertising company ironSource is announcing its second acquisition of the year — Luna Labs, a startup that’s built a platform allowing app developers to create and manage video and playable ads.
When I first wrote about the startup in 2019, its main selling point was the ability to create those ads directly from the Unity game engine used by many developers. Since then, it has expanded its platform to support the creation of both playable and video ads (including unlimited variations of a gameplay video), manage their entire ad library, analyze their performance and even automatically optimize them based on install data. Its customers include Crazy Labs, Supersonic Studios, Lion Studios, Kwalee and Voodoo.
IronSource, meanwhile, has built a platform for mobile user growth and monetization. It was valued at more than $1 billion in its most recent funding round of more than $400 million, and in January it announced the acquisition of ad measurement company Soomla.
In a statement, ironSource’s co-founder and chief revenue officer Omer Kaplan said:
Our vision at ironSource is to build the most comprehensive growth platform for app developers, allowing them to focus on content creation and on building a great user experience, while we provide the infrastructure for their business expansion. Creatives are a key part of that and have only become more important as competition for user attention grows. But ad creative development and testing at scale is incredibly difficult and costly. Luna Labs solves that by bringing high quality end-to-end ad creation management to app developers, and we’re excited to be able to add that capability into the ironSource platform.
The financial terms of the acquisition were not disclosed. IronSource says that the Luna Labs team (currently based in the United Kingdom) will remain in its current offices, where it will continue developing its technology “under the ironSource umbrella.”
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SailPoint is buying SaaS management startup Intello
SailPoint, an identity management company that went public in 2017, announced it was going to be acquiring Intello, an early-stage SaaS management startup. The two companies did not share the purchase price.
SailPoint believes that by helping its customers locate all of the SaaS tools being used inside a company, it can help IT make the company safer. Part of the problem is that it’s so easy for employees to deploy SaaS tools without IT’s knowledge, and Intello gives them more visibility and control.
In fact, the term “shadow IT” developed over the last decade to describe this ability to deploy software outside of the purview of IT pros. With a tool like Intello, they can now find all of the SaaS tools and point the employees to sanctioned ones, while shutting down services the security pros might not want folks using.
Grady Summers, EVP of product at SailPoint, says that this problem has become even more pronounced during the pandemic as many companies have gone remote, making it even more challenging for IT to understand what SaaS tools employees might be using.
“This has led to a sharp rise in ungoverned SaaS sprawl and unprotected data that is being stored and shared within these apps. With little to no visibility into what shadow access exists within their organization, IT teams are further challenged to protect from the cyber risks that have increased over the past year,” Summers explained in a statement. He believes that with Intello in the fold, it will help root out that unsanctioned usage and make companies safer, while also helping them understand their SaaS spend better.
Intello has always seen itself as a way to increase security and compliance and has partnered in the past with other identity management tools like Okta and OneLogin. The company was founded in 2017 and raised $5.8 million according to Crunchbase data. That included a $2.5 million extended seed in May 2019.
Yesterday, another SaaS management tool, Torii, announced a $10 million Series A. Other players in the SaaS management space include BetterCloud and Blissfully, among others.
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Acast acquires podcasting startup RadioPublic
Podcast advertising company Acast is announcing that it has acquired RadioPublic, the startup that spun out of public radio marketplace PRX in 2016.
At first, RadioPublic’s main product was a mobile app for podcast listening, and it still supports the app. But co-founder and Chief Product Officer Matt MacDonald said that over time, the team’s focus shifted to products for podcasters, specifically its Listener Relationship Management Platform, which includes an embeddable web player, custom websites called Podsites and more.
“We had a whole roadmap of things we wanted to build, but we recognized that at our scale, we could be better served by partnering up with bigger organizations,” MacDonald said.
And ultimately, they decided Acast made sense as not just a partner, but an owner. Acast’s business still revolves around podcast advertising, but it’s also expanded with new tools like the Acast Open hosting platform, and it says it now hosts 20,000 podcasts, collectively reaching 300 million monthly listeners.
“The acquisition of RadioPublic is fundamentally a partnership of values,” said Acast’s chief business and strategy officer Leandro Saucedo in a statement. “We both firmly believe in the open ecosystem of podcasting and have a shared commitment to aid listener discovery and support all creators. We’re impressed by what RadioPublic has achieved and we believe that now — as podcasting is gaining more momentum than ever before — is the ideal time to bring RadioPublic’s talented team and company missions into the Acast fold.”
The financial terms of the acquisition were not disclosed, but Acast says it will not affect RadioPublic operationally.
MacDonald and his co-founder/CTO Chris Quamme Rhoden are both joining Acast (CEO Jake Shapiro departed last fall to lead creator partnerships for Apple Podcasts), and although they’ll be working to integrate RadioPublic features into the Acast platform, MacDonald said the startup will continue to support its own products and mobile apps for “the foreseeable future.”
He added that as RadioPublic works with Acast, the team will remain focused on “strengthening and deepening that relationship, that bond, that affinity between the podcaster and the listener.” In his view, that’s where RadioPublic’s opportunity lies, even as big platforms like Spotify invest in podcasting.
“How do we enable you, as the creator, to control the relationship you have with your audience?” MacDonald said. “We believe that a podcast’s listeners are the podcast’s listeners. They are not the platform’s customers.”
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Logging startups are suddenly hot as CrowdStrike nabs Humio for $400M
A couple of weeks ago SentinelOne announced it was acquiring high-speed logging platform Scalyr for $155 million. Just this morning CrowdStrike struck next, announcing it was buying unlimited logging tool Humio for $400 million.
In Humio, CrowdStrike gets a company that will provide it with the ability to collect unlimited logging information. Most companies have to pick and choose what to log and how long to keep it, but with Humio, they don’t have to make these choices, with customers processing multiple terabytes of data every single day.
Humio CEO Geeta Schmidt writing in a company blog post announcing the deal described her company in similar terms to Scalyr, a data lake for log information:
“Humio had become the data lake for these enterprises enabling searches for longer periods of time and from more data sources allowing them to understand their entire environment, prepare for the unknown, proactively prevent issues, recover quickly from incidents, and get to the root cause,” she wrote.
That means with Humio in the fold, CrowdStrike can use this massive amount of data to help deal with threats and attacks in real time as they are happening, rather than reacting to them and trying to figure out what happened later, a point by the way that SentinelOne also made when it purchased Scalyr.
“The combination of real-time analytics and smart filtering built into CrowdStrike’s proprietary Threat Graph and Humio’s blazing-fast log management and index-free data ingestion dramatically accelerates our [eXtended Detection and Response (XDR)] capabilities beyond anything the market has seen to date,” CrowdStrike CEO and co-founder George Kurtz said in a statement.
While two acquisitions don’t necessarily make a trend, it’s clear that security platform players are suddenly seeing the value of being able to process the large amounts of information found in logs, and they are willing to put up some cash to get that capability. It will be interesting to see if any other security companies react with a similar move in the coming months.
Humio was founded in 2016 and raised just over $31 million, according to Pitchbook Data. Its most recent funding round came in March 2020, a $20 million Series B led by Dell Technologies Capital. It would appear to be a decent exit for the startup.
CrowdStrike was founded in 2011 and raised over $480 million before going public in 2019. The deal is expected to close in the first quarter, and is subject to typical regulatory oversight.
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Ad Practitioners acquires Knoq to move the startup’s door-to-door marketing approach online
Knoq (formerly known as Polis) was a startup that recruited representatives to go door-to-door in their neighborhoods, talking up client products and services. So for obvious reasons, it faced challenges in 2020.
“We stopped knocking on doors in February, and this summer, we were trying to figure out what the path forward was,” founder and CEO Kendall Tucker told me.
The company had already pivoted once, shifting focus from political work to commercial marketing. But Tucker said Knoq also had some attractive assets, namely its “unique, huge consumer models” designed to predict whether someone would be interested in a given product, as well as “the experience of building out these teams of neighborhood representatives.”
So after what she described as a competitive bidding process, Knoq was acquired by Ad Practitioners, a digital media company that owns properties like Money.com and ConsumersAdvocate.org.
As part of Ad Practitioners, Tucker said Knoq’s network of “Knoqers” will be able to interact with visitors to those properties and help “pair consumers with the right product,” whether that’s auto insurance or software. After all, she noted that plenty of consumers are connecting with Ad Practitioners via chat bots and phone calls: “These are people already asking for help … we’re really just connecting the dots.”
Image Credits: Knoq
In the acquisition announcement, Ad Practitioners CEO Greg Powel made a similar point, saying that the deal represents “a shared vision of helping people make decisions through conversations driven by data and technology while educating people about products and services that matter.”
“The Money and ConsumersAdvocate.org brands are already trusted by millions of highly engaged users,” Powel continued. “Together, we foresee a world where consumers come to our sites for great content [and] reviews and to speak with representatives who can help them find the personal information they need.”
Knoq leadership has already moved to join Ad Practitioners in Puerto Rico, with the rest of the Knoq team set to relocate later this year as well.
You might think a startup would be inclined to stay put in its current location (in Knoq’s case, Boston), at least for the duration of the pandemic, but Tucker said she’s a big believer in seeing your team in person. In fact, the Knoq team had socially distanced outdoor meetups over the summer, “to brainstorm or just hang out and make sure people are okay.” Plus, she’s excited about the possibility of “hiring the amazing people on this island.”
The financial terms of the acquisition were not disclosed. Knoq had most recently raised $2.5 million from Initialized Capital and Haystack.vc, and Tucker said it was crucial that the acquisition provided a good outcome not just for her team and herself, but also her investors.
“We’re so excited for Kendall and her team on their successful exit to Ad Practitioners,” said Initialized General Partner Alda Leu Dennis in a statement. “It’s been a pleasure partnering with Knoq over the last few years. The Knoq team will bring a tech-forward approach to sales outreach and customer analytics. And, Kendall’s skills as a brilliant builder, operator and strategic thinker will be a huge asset for Ad Practitioners.”
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Datadog to acquire application security management platform Sqreen
Cloud monitoring platform Datadog has announced that it plans to acquire Sqreen, a software-as-a-service security platform. Originally founded in France, Sqreen participated in TechCrunch’s Startup Battlefield in 2016.
Sqreen is a cloud-based security product to protect your application directly. Once you install the sandboxed Sqreen agent, it analyzes your application in real time to find vulnerabilities in your code or your configuration. There’s a small CPU overhead with Sqreen enabled, but there are some upsides.
It can surface threats and you can set up your own threat detection rules. You can see the status of your application from the Sqreen dashboard, receive notifications when there’s an incident and get information about incidents.
For instance, you can see blocked SQL injections, see where the injection attempts came from and act to prevent further attempts. Sqreen also detects common attacks, such as credential stuffing attacks, cross-site scripting, etc. As your product evolves, you can enable different modules from the plugin marketplace.
Combining Datadog and Sqreen makes a lot of sense, as many companies already rely on Datadog to monitor their apps. Sqreen has a good product, Datadog has a good customer base. So you can expect some improvements on the security front for Datadog.
Sqreen raised a $2.3 million round from Alven Capital, Point Nine Capital, Kima Ventures, 50 Partners and business angels. It then participated in TechCrunch’s Startup Battlefield — it made it to the finals but didn’t win the competition. The startup attended Y Combinator a bit later.
In 2019, Sqreen raised a $14 million Series A round led by Greylock Partners with existing investors Y Combinator, Alven and Point Nine participating once again.
Datadog and Sqreen have signed a definitive acquisition agreement. Terms of the deal remain undisclosed and the acquisition should close in Q2 2021.
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These 3 enterprise deals show there’s plenty of action in smaller acquisitions
Since the start of the year, I’ve covered nine M&A deals already, the largest being Citrix buying Wrike for $2.25 billion. But not every deal involves a huge price tag. Today we are going to look at three smaller deals that show there is plenty of activity at the lower-end of the acquisition spectrum.
As companies look for ways to enhance their offerings, and bring in some talent at the same time, smaller acquisitions can provide a way to fill in the product road map without having to build everything in-house.
This gives acquiring companies additional functionality for a modest amount of cash. In smaller deals, we often don’t even get the dollar amount, although in one case today we did. If the deal isn’t large enough to have a material financial impact on a publicly traded company, they don’t have to share the price.
Let’s have a look at three such deals that came through in recent days.
Tenable buys Alsid
For starters, Tenable, a network security company that went public in 2018, bought French Active Directory security startup Alsid for $98 million. Active Directory, Microsoft’s popular user management tool, is also a target of hackers. If they can get a user’s credentials, it’s an easy way to get on the network and Alsid is designed to prevent that.
Security companies tend to enhance the breadth of their offerings over time and Alsid gives Tenable another tool and broader coverage across their security platform. “We view the acquisition of Alsid as a natural extension into user access and permissioning. Once completed, this acquisition will be a strategic complement to our Cyber Exposure vision to help organizations understand and reduce cyber risk across the entire attack surface,” according to the investor FAQ on this acquisition.
Emmanuel Gras, CEO and co-founder, Alsid says he started the company to prevent this kind of attack. “We started Alsid to help organizations solve one of the biggest security challenges, an unprotected Active Directory, which is one of the most common ways for threat actors to move laterally across enterprise systems,” Gras said in a statement.
Alsid is based in Paris and was founded in 2014. It raised a modest amount, approximately $15,000, according to Crunchbase data.
Copper acquires Sherlock
Copper, a CRM tool built on top of the Google Workspace, announced it has purchased Sherlock, a customer experience platform. They did not share the purchase price.
The pandemic pushed many shoppers online and providing a more customized experience by understanding more about your customer can contribute to and drive more engagement and sales. With Sherlock, the company is getting a tool that can help Copper users understand their customers better.
“Sherlock is an innovative engagement analytics and scoring platform, and surfaces your prospects’ and customers’ intentions in a way that drives action for sales, account management and customer success professionals,” Copper CEO Dennis Fois wrote in a blog post announcing the deal.
He added, “Relationships are based on engagement, and with Sherlock we are going to create CRM that is focused on action and momentum.”
RapidAPI snags Paw
It’s clear that APIs have changed the way we think about software development, but they have also created a management problem of their own as they proliferate across large organizations. RapidAPI, an API management platform, announced today that it has acquired Paw.
With Paw, RapidAPI adds the ability to design your own APIs, essentially giving customers a one-stop shop for everything related to creating and managing the API environment inside a company. “The acquisition enables RapidAPI to extend its open API platform across the entire API development lifecycle, creating a connected experience for developers from API development to consumption, across multiple clouds and gateways,” the company explained in a statement.
RapidAPI was founded in 2015 and has raised over $67 million, according to Crunchbase data. Its most recent funding came last May, a $25 million round from Andreessen Horowitz, DNS Capital, Green Bay Ventures, M12 (Microsoft’s Venture Fund) and Grove.
Each of these purchases fills an important need for the acquiring company and expands the abilities of the existing platform to offer more functionality to customers without putting out a ton of cash to do it.
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Dating juggernaut Match buys Seoul-based Hyperconnect for $1.73B, its biggest acquisition ever
In a large win for the Korean startup ecosystem, dating powerhouse Match Group announced this afternoon that it would buy social networking company Hyperconnect for a combined cash and stock deal valued at $1.73 billion.
Hyperconnect, which is projected to have $200 million in revenue in 2020 (up 50% from 2019) according to the company, offers two apps — Azar and Hakuna Live — which allow users to connect to each other across language barriers. The two are complementary, with Azar focused on one-to-one video chats and Hakuna Live focused on the online live broadcast market. In their press statement, the companies noted that 75% of Hyperconnect’s revenue originates in Asia.
It’s the largest acquisition to date by Match Group, which also owns the popular dating apps Tinder and Hinge, along with many other assorted properties.
One theme of the acquisition and Hyperconnect’s story is technology. The company built what it describes as “the first mobile version” of WebRTC, a now well-developed standard that is designed to offer resilient peer-to-peer connections between users without relying on a company to serve as a middleman server.
For instance, a video chat between two participants would be transmitted directly between the two of them using WebRTC, without the video being broadcast through Hyperconnect’s servers. That’s designed to improve reliability by removing latency while also reducing the cost of bandwidth for the service to Hyperconnect. WebRTC is now a well-deployed open-source standard, with companies such as Google using it in products like Google Meet.
In addition to its innovative work on WebRTC, Hyperconnect built infrastructure to support two users who speak and text in different languages to interact with each other directly through its apps using real-time translation. In a marketing post on Google Cloud, Hyperconnect is a marquee customer of the cloud service’s speech, real-time translation and messaging APIs.
In the companies’ joint press statement, both sides emphasized R&D and engineering as key wins for the deal. That begs the question then what Match Group is looking to build with its massive new purchase? While the group has largely confined itself to dating, live broadcast and other media verticals may well be in its sights once it acquires the technology from Hyperconnect.
The deal is expected to close in 2021 Q2.
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Encrypted data handling startup DataFleets acquired by LiveRamp for over $68M
LiveRamp has acquired DataFleets, a fresh young startup that made it possible to take advantage of large volumes of encrypted data without the risk or fuss of decrypting or transferring it. LiveRamp, an enterprise data connectivity platform itself, paid more than $68 million for the company, a huge multiple on DataFleet’s $4.5 million seed announced just last fall.
DataFleets saw the increasing need for sensitive data like medical or financial records to be analyzed or used to train machine learning models. Not only are such databases bulky and complex, making transfers difficult, but allowing them to be decrypted and used elsewhere opens the door to errors, abuse and hacks.
The company’s solution was essentially to have software on both sides of the equation, the data provider (perhaps a hospital or bank) and the client (an analyst or AI developer), and act as a secure go-between. Not for the sensitive data itself, but for the systems of analysis and machine learning models that the client wanted to set loose on the data. This allows the client to perform an automated task on the data, such as harvesting and comparing values or building an ML model, without ever having direct access to it.
Clearly this approach seemed valuable to LiveRamp, which provides a number of data connectivity services to major enterprise customers, household names in fact. They announced in their earnings statement last night that they paid $68 million up front for DataFleets, though that price does not reflect the various other incentives and deferred payments that many such deals involve, and in this case seem likely to remain private.
The deal will probably result in the retiring of the DataFleets brand (young as it was), but their various customers will probably make the trip to LiveRamp. The most recent of those is HCA Healthcare, a major national provider that just announced a COVID-19 data sharing consortium that would be using DataFleets’s services. That’s a pretty powerful validation for an approach just commercialized late last year, and a nice catch for LiveRamp to add to its healthcare client collection.
For its part LiveRamp plans to use its augmented services to expand its operations and offerings in Europe, Asia and Latin America over the coming year. The company has also called for a federal data privacy law, something that hopefully that will be achieved under the new administration.
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SentinelOne to acquire high-speed logging startup Scalyr for $155M
SentinelOne, a late-stage security startup that helps customers make sense of security data using AI and machine learning, announced today that it is acquiring high-speed logging startup Scalyr for $155 million in stock and cash.
SentinelOne sorts through oodles of data to help customers understand their security posture, and having a tool that enables engineers to iterate rapidly in the data, and get to the root of the problem, is going to be extremely valuable for them, CEO and co-founder Tomer Weingarten explained. “We thought Scalyr would be just an amazing fit to our continued vision in how we secure data at scale for every enterprise [customer] out there,” he told me.
He said they spent a lot of time shopping for a company that could meet their unique scaling needs and when they came across Scalyr, they saw the potential pretty quickly with a company that has built a real-time data lake. “When we look at the scale of our technology, we obviously scoured the world to find the best data analytics technology out there. We [believe] we found something incredibly special when we found a platform that can ingest data, and make it accessible in real time,” Weingarten explained.
He believes the real time element is a game changer because it enables customers to prevent breaches, rather than just reacting to them. “If you’re thinking about mitigating attacks or reacting to attacks, if you can do that in real time and you can process data in real time, and find the anomalies in real time and then meet them, you’re turning into a system that can actually deflect the attacks and not just see them and react to them,” he explained.
The company sees Scalyr as a product they can integrate into the platform, but also one which will remain a standalone. That means existing customers should be able to continue using Scalyr as before, while benefiting from having a larger company contributing to its R&D.
While SentinelOne is not a public company, it is a pretty substantial private one, having raised over $695 million, according to Crunchbase data. The company’s most recent funding round came last November, a $267 million investment with a $3.1 billion valuation.
As for Scalyr, it was launched in 2011 by Steve Newman, who first built a word processor called Writely and sold it to Google in 2006. It was actually the basis for what became Google Docs. Newman stuck around and started building the infrastructure to scale Google Docs, and he used that experience and knowledge to build Scalyr. The startup raised $27 million along the way, according to Crunchbase data, including a $20 million Series A investment in 2017.
The deal will close this quarter, at which time Scalyr’s 45 employees will join SentinelOne.
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