What I am seeing is a number of small (4-8 people) collaboration start-ups that have been gobbled up by larger organizations within 18 months of their start. The first one of these I had personal experience (as a minor stock holder) with was Kibits, who changed their name to collaborate.com when they bought the domain from me a year ago. Within 6 months they had been discovered, vetted, and bought by Cisco.
I saw the same thing happen again with Assemblage. Cathrine and Christian from Stockholm were making collaboration tools totally based on WebRTC and a year ago their initial tool was called Kollaborate.io. Cathrine came to SF about 6 months after they started as CEO and CMO, and Christian was doing most of the development. Their tool was free, and so many people tried it. Catherine went through a 6 month incubator process, and I got invited to the incubator graduation where each of the companies got to do a 6 minute presentation. By that time they had broken their tool up into 3, based on functions: collaborate.io, Share.io and present.io. They got $1M in funding 3 days after the demo (which has to be some kind of record). Then last week I got an e-mail saying they had been purchased by Cisco, and the Assemblage sites were closing down. Unfortunately, I did not have stock in this one.
This got me to thinking, how many other collaboration start-ups have been snapped up by larger companies in the last year. So I did some research and found there had been quite a few:
- WorkVoices acquired by Viadesk
- PGI acquired Powwownow
- PGI acquired ACT conferencing
- (November 2012) Jive acquired New York-based social task management company Producteev
- Jive acquired and San Francisco-based Meetings.io, a real-time communications platform
- Jive acquired Offisync ($27M)
- Rally software acquires Flowdock
- ViewPoint acquires 4Projects
- Telligent acquires Zimbra (from VMware)
- PEGASYSTEMS ACQUIRES COLLABORATION AND CO-BROWSING PROVIDER FIREFLY
- Autodesk acquires Qontext
- Citrix acquired Podio
- Citrix acquired Netviewer
- Citrix acquired RingCube ($33M)
- Google acquired QuickOffice
- Google acquired Docverse
I am sure there are many more that I missed, but I think this is enough data points to show a trend.
This same kind of thing happened in 2007-2008, but at that time it was document management and project management companies that were being pressed by their user base for collaboration features. This time it is cloud-based solutions that need collaboration features, so it is no big surprise that many of these start-ups are being snapped up again.
Most of these acquired start-ups had these characteristics:
- They already had a good number of users
- They were already through a seed round, and sometimes an A round of funding
- They were 4-20 people (in general)
- Some were co-located, some were distributed
- They all had great teams with lots of talent and creativity
- Often they had identified a need or trend before the larger companies had, and so had a head start, making the big companies think that it is easier to buy than build.
- Their technology had to be compatible with the big companies in some way.
- They were part of the big companies new collaboration strategy
I expect this trend of acquiring early stage collaboration start-ups to still be quite active in 2014 and 2015, as there are many pieces to the collaboration puzzle, and no one vendor has solved this puzzle yet!