Atlassian said it will acquire video messaging company Loom for $975 million in a move that brings asynchronous video to its team collaboration platform.
In a statement, Atlassian said it will acquire Loom for $975 million including Loom's cash balance. Atlassian said it will pay $880 million in cash and the remainder in equity awards. The deal is expected to close in Atlassian's fiscal third quarter.
Loom has more than 25 million users and its customers record nearly 5 million videos a month.
Atlassian, which has collaboration and productivity software aim at distributed workforces, said asynchronous video is the next evolution of team collaboration. Atlassian has more than 260,000 customers using products such as Jira and Confluence.
For the fiscal year ended Aug. 3, Atlassian delivered revenue of $3.53 billion with a net loss of $486.7 million. Non-GAAP earnings for fiscal 2023 were $492 million. The company said it was playing offense and driving enterprise sales, expanding from ITSM to supporting teams in legal and HR with Jira Service Management and adding generative AI capabilities to its platform.
Atlassian appears in the following Constellation ShortLists:
- Constellation ShortList™ Work Coordination Platforms
- Constellation ShortList™ DevOps
- Constellation ShortList™ Incident Management
According to Atlassian, Loom's investments in AI will also be useful to provide video, transcripts, summaries, documents and workflows. Loom customers will be able to add asynchronous video into Jira and Confluence. Loom will continue to be sold as a standalone product similar to Trello, which is a subsidiary of Atlassian.
In a blog post, co-founders and co-CEOs Mike Cannon-Brookes and Scott Farquhar said:
"The rise of distributed work has meant a greater reliance on tools to help teams work asynchronously, across different geographies and time zones.
This is where async video comes in, a tool increasingly sitting side-by-side with other modes of communication like text, presentations, and spreadsheets."
Atlassian's move comes at an interesting time. For instance, video-first communications firms such as Zoom are branching out into broader collaboration.
Constellation Research’s take
Constellation Research analyst Liz Miller handicapped Atlassian’s Loom acquisition. She said:
“While this feels like a video channel pick up for the project management and work collaboration platform, Atlassian picking up Loom opens the doors to cross team collaboration and best practice documentation and exchange. Bringing Loom into the Atlassian portfolio is a good signal that the project management and collaboration platform understands that the WAY teams want to engage, share and collaborate around work is forever shifting.
In a relatively brief period of time, Loom has become one of the hottest ways for teams to communicate, share and collaborate with a growing list of use cases and applications emerging at a pace driven by users. Everyone from sellers to HR teams has used Loom videos as a quick and easy way to communicate. Some of the most interesting use cases have been teams cataloging best practices and “how to” sessions as they learn tools, tricks and shortcuts to getting the job done. We have also seen other CX functions leverage “Looms” from customer service knowledge center clips to quick bite demos being used to deliver brief introductions in sales motions to tutorials around company policy or team on boarding.
Asynchronous communication across project teams is just one step to this pick up…and to be sure, it is an important addition to enable cross project team collaboration via video messaging. However, what this deal also opens for organizations managing complex projects with Atlassian is historical knowledge exchange and documentation. Loom videos have become a powerful connection between the teams of today and the teams of tomorrow. It can also provide a critical content pipeline to teams looking to gain insights from video conversation transcripts or AI powered summaries or analytics.”
Related:
