Onit acquires legal startup McCarthyFinch to inject AI into legal workflows

Onit, a workflow software company based in Houston with a legal component, announced this week that it has acquired 2018 TechCrunch Disrupt Battlefield alum McCarthyFinch.  Onit intends to use the startup’s AI skills to beef up its legal workflow software offerings.

The companies did not share the purchase price.

After evaluating a number of companies in the space, Onit focused on McCarthyFinch, which gives it an artificial intelligence component the company’s legal workflow software had been lacking. “We evaluated about a dozen companies in the AI space and dug in deep on six of them. McCarthyFinch stood out from the pack. They had the strongest technology and the strongest team,” Eric M. Elfman, CEO and co-founder of Onit told TechCrunch.

The company intends to inject that AI into its existing Aptitude workflow platform.”Part of what really got me excited about McCarthyFinch was the very first conversation I had with their CEO, Nick Whitehouse. They considered themselves an AI platform, which complemented our approach and our workflow automation platform, Aptitude,” Elfman said.

McCarthyFinch CEO and co-founder Whitehouse says the startup was considering whether to raise more money or look at being acquired earlier this year when Onit made its interest known. At first, he wasn’t really interested in being acquired and was hoping to go the partner route, but over time that changed.

“I was very much on the partner track, and was probably quite dismissive to begin with because I was quite focused on that partner strategy. But as we talked, all egos aside, it just made sense [to move to acquisition talks],” Whitehouse said.

The talks heated up in May and the deal officially closed last week. With Onit, headquartered in Houston and McCarthyFinch in New Zealand, the negotiations and meetings all happened on Zoom. The two companies’ principals have never met in person. The plan is for McCarthyFinch to stay in place, even after the pandemic ends. Whitehouse expects to make a trip to Houston whenever it is safe to do so.

Whitehouse says his experience with Battlefield has had a huge influence on him. “Just the insights that we got through Battlefield, the coaching that we got, those things have stuck with me and they’ll stick with me for the rest of my life,” he said.

The company had 45 customers and 17 employees at the time of the acquisition. It raised $5 million US dollars along the way. Now it becomes part of Onit as the journey continues.


By Ron Miller

IBM is acquiring APM startup Instana as it continues to expand hybrid cloud vision

As IBM transitions from software and services to a company fully focussed on hybrid cloud management, it announced  its intention to buy Instana, an applications performance management startup with a cloud native approach that fits firmly within that strategy.

The companies did not reveal the purchase price.

With Instana, IBM can build on its internal management tools, giving it a way to monitor containerized environments running Kubernetes. It hopes by adding the startup to the fold it can give customers a way to manage complex hybrid and multi-cloud environments.

“Our clients today are faced with managing a complex technology landscape filled with mission-critical applications and data that are running across a variety of hybrid cloud environments – from public clouds, private clouds and on-premises,” Rob Thomas, senior vice president for cloud and data platform said in a statement. He believes Instana will help ease that load, while using machine learning to provide deeper insights.

At the time of the company’s $30 million Series C in 2018, TechCrunch’s Frederic Lardinois described the company this way. “What really makes Instana stand out is its ability to automatically discover and monitor the ever-changing infrastructure that makes up a modern application, especially when it comes to running containerized microservices.” That would seem to be precisely the type of solution that IBM would be looking for.

As for Instana, the founders see a good fit for the two companies, especially in light of the Red Hat acquisition in 2018 that is core to IBM’s hybrid approach. “The combination of Instana’s next generation APM and Observability platform with IBM’s Hybrid Cloud and AI technologies excited me from the day IBM approached us with the idea of joining forces and combining our technologies,” CEO Mirko Novakovic wrote in a blog post announcing the deal.

Indeed, in a recent interview IBM CEO Arvind Krishna told CNBC’s Jon Fortt, that they are betting the farm on hybrid cloud management with Red Hat at the center. When you combine that with the decision to spin out the company’s managed infrastructure services business, this purchase shows that they intend to pursue every angle

“The Red Hat acquisition gave us the technology base on which to build a hybrid cloud technology platform based on open-source, and based on giving choice to our clients as they embark on this journey. With the success of that acquisition now giving us the fuel, we can then take the next step, and the larger step, of taking the managed infrastructure services out. So the rest of the company can be absolutely focused on hybrid cloud and artificial intelligence,” Krishna told CNBC.

Instana, which is based in Chicago with offices in Munich, was founded in 2015 in the early days of Kubernetes and the startup’s APM solution has evolved to focus more on the needs of monitoring in a cloud native environment. The company raised $57 million along the way with the most recent round being that Series C in 2018.

The deal per usual is subject to regulatory approvals, but the company believes it should close in the next few months.


By Ron Miller

Palo Alto Networks to acquire Expanse in deal worth $800M

Palo Alto Networks has been on buying binge for the last couple of years, and today it added to its haul, announcing a deal to acquire Expanse for $800 million in cash and equity awards. The deal breaks down to $670 million in cash and stock and another $130 million in equity awards to Expanse employees.

Expanse provides a service to help companies understand and protect their attack surface, where they could be most vulnerable to attack. It works by giving the security team a view of how the company’s security profile could look to an attacker trying to gain access.

The plan is to fold Expanse into Palo Alto’s Cortex Suite, an AI-driven set of tools designed to detect and prevent attacks in an automated way. Expanse should provide Palo Alto with a highly valuable set of data to help feed the AI models.

“By integrating Expanse’s attack surface management capabilities into Cortex after closing, we will be able to offer the first solution that combines the outside view of an organization’s attack surface with an inside view to proactively address all security threats,” Palo Alto Networks chairman and CEO Nikesh Arora said in a statement.

Expanse sees the acquisition as a way to accelerate the company road map using the resources of a larger company like Palo Alto, a typical argument from companies being acquired. “Joining forces with Palo Alto Networks will let us achieve our most important business goals years ahead of schedule. During the course of conversations with Palo Alto Networks leadership, we shared optimism that the right combination of technology and people can solve many cybersecurity challenges that to date have seemed intractable,” the startup’s founders wrote in a blog post announcing the deal.

The two co-founders, Dr. Tim Junio and Dr. Matt Kraning, will be joining Palo Alto under the terms of the deal, which is expected to close in Palo Alto’s fiscal second quarter, assuming it passes regulatory muster.

Expanse was founded in 2012 and has raised $130 million, according to Crunchbase data. Its most recent raise was a $70 million Series C last year, which was led by TPG.

Today’s acquisition is Palo Alto’s third in 2020 and the 10th since 2018. Palo Alto stock was up 2.15% in early trading.


By Ron Miller

Adobe acquires marketing workflow startup Workfront for $1.5B

Adobe just announced that it is acquiring marketing workflow management startup Workfront for $1.5 billion. Bloomberg first reported the sale would be happening earlier today.

Workfront was founded back in 2001, making it a bit long in tooth for a private company that has raised $375 million, according to Crunchbase. But it gives Adobe more online marketing tooling to fit into its Experience Cloud. This one helps companies manage complex projects inside the marketing department.

“The combination of Adobe and Workfront will further accelerate Adobe’s leadership in customer experience management, providing a pioneering solution that spans the entire lifecycle of digital experiences, from ideation to activation,” Anil Chakravarthy, executive vice president and general manager for Adobe’s digital experience business and worldwide field operations said in a statement.

Holger Mueller, an analyst at Constellation Research says the acquisition will help Adobe customers manage the complexities of marketing project management. “Scheduling and managing work had gotten orders of mangnitude more complex for enterprises, and Adobe is accounting for that with the acquisition of Workfront, providing better tool support for the new future of work,” Mueller told TechCrunch.

The two companies are actually partners and work together frequently sharing 1000 common customers among Workfront’s 3000 total customer base. In fact, Workfront has APIs that connect to Adobe Creative Cloud and Experience Cloud, two parts of the company’s product family that marketers frequently access. As Adobe battles Salesforce, SAP and Oracle in the marketing automation space, it’s been using its checkbook to acquire additional fire power in recent years.

This acquisition comes after Adobe spent $1.6 billion for Magento and $4.75 billion for Marketo in 2018. That’s almost $8 billion for three companies in under two years, even as it builds out parts of its Adobe Experience Cloud in-house. Combined, it shows just how serious the company is about making headway in this valuable area.

Customer experience has always been an essential element of online and in-person transactions, making sure the customer feels good about the interactions it has with a brand. It not only keeps them coming back, but it encourages them to act as ambassadors on behalf of a company, something that has incredible value.

Conversely a bad experience can lead to the opposite impact, causing a prospective or even loyal customer to abandon a brand and speak badly about it to friends online and in person. Adobe hopes that by bringing another marketing tool into the fold, it can help its customers increase the likelihood of a positive online customer experience. This one should allow company marketing personnel working at a company to move marketing projects through a workflow from idea to online.

The deal is expected to close in the first quarter of Adobe’s fiscal year. Per usual, it will be subject to typical regulatory scrutiny.

This is a breaking story. We will continue to update as we get additional information.


By Ron Miller

Coupa Software snags Llamasoft for $1.5B to bring together spending and supply chain data

Coupa Software, a publicly traded company that helps large corporations manage spending, announced that it was buying Llamasoft, an 18 year old Michigan company that helps large companies manage their supply chain. The deal was pegged at $1.5 billion.

This year Llamasoft released its latest tool, an AI-driven platform for managing supply chains intelligently. This capability in particular seemed to attract Coupa’s attention, as it was looking for a supply chain application to compliment its spend management capabilities.

Coupa CEO and chairman Rob Bernshteyn says when you combine that supply chain data with Coupa’s spending data, it can produce a powerful combination.

“Lamasoft’s deep supply chain expertise and sophisticated data science and modeling capabilities, combined with the roughly $2 trillion of cumulative transactional spend data we have in Coupa, will empower businesses with the intelligence needed to pivot on a dime,” Bernshteyn said in a statement.

The purchase comes at a time when companies are focusing more and more on digitizing processes across enterprise, and when supply chains can be uncertain, depending on the location of COVID hotspots at any particular time.

“With demand uncertainty on one hand, and supply volatility on the other, companies are in need of supply chain technology that can help them assess alternatives and balance trade-offs to achieve desired business results. LLamasoft provides these capabilities with an AI-powered cloud platform that empowers companies to make smarter supply chain decisions, faster,” the company wrote in a statement.

Llamasoft was founded in 2002 in Ann Arbor, Michigan and has raised over $56 million, according to Crunchbase data. Its largest raise was a $50 million Series B in 2015 led by Goldman Sachs.

The company generated more than $100 million in revenue and has 650 big customers including Boeing, DHL, Kimberly-Clark and GM, according to company data.

Coupa has been extremely acquisitive over the years, buying 17 companies, according to Crunchbase data. This deal represents the fourth acquisition this year for the company. So far the stock market is not enamored with the acquisition with the company’s stock price down 5.20% at publication.


By Ron Miller

Twilio wraps $3.2B purchase of Segment after warp speed courtship

It was barely a month ago we began hearing rumors that Twilio was interested in acquiring Segment. The $3.2 billion deal was officially announced three weeks ago, and this morning the communications API company announced that the deal had closed, astonishingly fast for an acquisition of this size.

While we can’t know for sure, the speed with which the deal closed could suggest that it was in the works longer than we had known, and when we began hearing rumors of the acquisition, it could have already been signed, sealed and delivered. In addition, the fact that Twilio CEO Jeff Lawson and Segment CEO Peter Reinhardt knew one another before coming to terms might have helped accelerate the process.

Regardless, the two companies are a nice fit. Both deal with the API economy, providing a set of tools to help developers easily add a particular set of functions to their applications. For Twilio, that’s a set of communications APIs, while Segment focuses on customer data.

When you pull the two sets of tooling together, and combine that with Twilio’s 2018 SendGrid acquisition, you can see the possibility to build more complete applications for interacting with customers at every level including basic communications like video, SMS and audio from Twilio, as well as customer data from Segment and customized emails and ads based on those interactions from SendGrid.

As companies increasingly focus on digital engagement, especially in the midst of a pandemic, Twilio’s Lawson believes the biggest roadblock to this type of engagement has been that data has been locked in silos, precisely the kind of problem that Segment has been attacking.

“With the addition of Segment, Twilio’s Customer Engagement Platform now enables companies to both understand their customer and engage with them digitally — the combination is key to building great digital experiences,” Lawson said in a statement.

In a recent post looking at the reasoning behind the deal, Brent Leary, founder and principal analyst at CRM Essentials saw it this way: “This move allows Twilio to impact the data-insight-interaction-experience transformation process by removing friction from developers using their platform,” Leary explained.

With the deal closed, Segment will become a division of Twilio. Reinhardt will continue to be CEO, and will report directly to Lawson.


By Ron Miller

Intel acquires SigOpt, a specialist in modeling optimization, to boost its AI business

Intel has been doubling down on building chips and related architecture for the next generation of computing, and today it announced an acquisition that will bolster its expertise and work specifically in one area of future technology: artificial intelligence.

The semiconductor giant today announced that it has acquired SigOpt, a startup out of San Francisco that has built an optimization platform that can be used to run modeling and simulations (two key applications of AI tech) in a better way. Anthony described SigOpt as a startup built to “optimize everything” when we covered its Series A last year, but Intel specifically will be integrating the tech into its AI business, specifically into its AI Analytics Toolkit, a spokesperson tells me.

Terms of the deal were not disclosed but SigOp already counted a number of large enterprises — “SigOpt’s customer base includes Fortune 500 companies across industries, as well as leading research institutions, universities and consortiums using its products” — among its customers. The product was still in a closed beta, however. Notably, it had raised money from an interesting group of investors that included In-Q-Tel (the firm associated with the CIA that makes strategic investments) and Andreessen Horowitz, and Y Combinator, among others. It had raised less than $10 million.

The plan will be to continue providing services to existing users, and to continue building out the company’s platform — co-founders Scott Clark (CEO) and Patrick Hayes (CTO) and their team are joining Intel.

“We will continue to work with SigOpt’s existing customers and will also integrate the technology into our product roadmap,” a spokesperson confirmed.

While Intel is working hard on streamlining its business around next-generation chips to better compete against the likes of NVIDIA (which itself is growing substantially with the acquisition of ARM) and smaller players like GraphCore, in part by divesting more legacy operations, it seems a strong opportunity in providing services for its customers alongside those chips, and these services specifically will help customers with the compute loads that they will be running on those chips.

The focus for Intel has been on the next generation of computing to offset declines in its legacy operations. In the last quarter, even as it beat expectations, Intel reported a 3% decline in its revenues, led by a drop in its data center business. It said that it’s projecting the AI silicon market to be bigger than $25 billion by 2024, with AI silicon in the data center to be greater than $10 billion in that period.

In 2019, Intel reported some $3.8 billion in AI-driven revenue but it hopes that tools like SigOpt’s will help drive more activity in that business, dovetailing with the push for more AI applications in a wider range of businesses.

“In the new intelligence era, AI is driving the compute needs of the future. It is even more important for software to automatically extract the best compute performance while scaling AI models,” said Raja Koduri, Intel’s chief architect and senior vice president of its discrete graphics division. “SigOpt’s AI software platform and data science talent will augment Intel software, architecture, product offerings and teams, and provide us with valuable customer insights. We welcome the SigOpt team and its customers to the Intel family.”

While there could potentially be a number of applications for SigOpt’s tech, this is a signal of how bigger players will continue to consolidate specific services around their bigger business, giving the small startup a much bigger horizon in terms of potential business (even if it is all tied to customers that only use Intel hardware).

“We are excited to join Intel and supercharge our mission to accelerate and amplify the impact of modelers everywhere. By combining our AI optimization software with Intel’s decades-long leadership in AI computing and machine learning performance, we will be able to unlock entirely new AI capabilities for modelers,” said Clark in a statement.


By Ingrid Lunden

More chip industry action as Marvell is acquiring Inphi for $10B

It’s been quite a time for chip industry consolidation, and today Marvell joined the acquisition parade when it announced it is acquiring Inphi in a combination of stock and cash valued at approximately $10 billion, according to the company.

Marvell CEO Matt Murphy believes that by adding Inphi, a chip maker that helps connect internal servers in cloud data centers, and then between data centers, using fibre cabling, it will complement Marvell’s copper-based chip portfolio and give it an edge in developing more future-looking use cases where Inphi shines.

“Our acquisition of Inphi will fuel Marvell’s leadership in the cloud and extend our 5G position over the next decade,” Murphy said in a statement.

In the classic buy versus build calculus, this acquisition uses the company’s cash to push it in new directions without having to build all this new technology. “This highly complementary transaction expands Marvell’s addressable market, strengthens customer base and accelerates Marvell’s leadership in hyperscale cloud data centers and 5G wireless infrastructure,” the company said in a statement.

It’s been a busy time for the chip industry as multiple players are combining hoping for a similar kind of lift that Marvell sees with this deal. In fact, today’s announcement comes in the same week AMD announced it was acquiring Xilinx for $35 billion and follows Nvidia acquiring ARM for $40 billion last month. The three deals combined come to a whopping $85 billion.

There appears to be prevailing wisdom in the industry that by combining forces and using the power of the checkbook, these companies can do more together than they can by themselves.

Certainly Marvell and Inphi are suggesting that. As they highlighted, their combined enterprise value will be more than $40 billion with hundreds of millions of dollars in market potential. All of this of course depends on how well these combined entities work together and we won’t know that for some time.

For what it’s worth, the stock market appears unimpressed with the deal with Marvell’s stock down over 7% in early trading, but Inphi stock is being bolstered in a big way by the announcement, up almost 23% this morning so far.

The deal, which has been approved by both companies’ boards, is expected to close by the second half of 2021 subject to shareholder and regulatory approval.


By Ron Miller

Qualtrics CEO Ryan Smith is buying majority stake in the Utah Jazz for $1.6B

The Utah Jazz, an NBA basketball team based in Salt Lake City, announced today that Qualitrics CEO and co-founder Ryan Smith was buying a majority stake in the team along other properties. ESPN is reporting the deal is worth $1.6 billion.

Smith can afford it. He sold Qualtrics, which is based in Provo, Utah, in 2018 to SAP for $8 billion just before the startup was about to go public. Earlier this year, SAP announced plans to spin out Qualtrics as public company.

In addition to The Jazz, he’s also getting Vivint Arena, the National Basketball Association (NBA) G League team Salt Lake City Stars and management of the Triple-A baseball affiliate Salt Lake Bees. Smith is buying the properties from the Miller family, who have run them for three decades.

Smith was over the moon about being able to buy into a franchise he has supported over the years. “My wife and I are absolutely humbled and excited about the opportunity to take the team forward far into the future – especially with the greatest fans in the NBA. The Utah Jazz, the state of Utah, and its capital city are the beneficiaries of the Millers’ tremendous love, generosity and investment. We look forward to building upon their lifelong work,” he said in a statement.

The deal is pending approval of the NBA Board Governors, but once that happens, Smith will have full decision making authority over the franchise. He is not the first tech billionaire to buy a basketball team.

Qualtrics, which makes customer survey tools, was founded in 2002 and raised over $400 million from firms like Accel, Insight Partners and Sequoia before selling the company two years ago to SAP.

Smith is not the first tech billionaire to buy a basketball team. He joins Mark Cuban, who bought the Dallas Mavericks in 1999 after selling Broadcast.com to Yahoo for $5.7 billion that same year. Former Microsoft CEO Steve Ballmer bought the Los Angeles Clippers in 2014 for $2 billion.


By Ron Miller

AMD grabs Xilinx for $35 billion as chip industry consolidation continues

The chip industry consolidation dance continued this morning as AMD has entered into an agreement to buy Xilinx for $35 billion, giving the company access to customers requiring chips with high performance workloads like artificial intelligence.

AMD sees this deal as combining two companies that complement each other’s strengths without cannibalizing its own markets. CEO Lisa Su believes the acquisition will help make her company the high performance chip leader.

“By combining our world-class engineering teams and deep domain expertise, we will create an industry leader with the vision, talent and scale to define the future of high performance computing,” Su said in a statement.

In an article earlier this year, TechCrunch’s Darrell Etherington described Xilinx new satellite focused chips as offering a couple of industry firsts:

It’s the first 20nm process that’s rated for use in space, offering power and efficiency benefits, and it’s the first to offer specific support for high performance machine learning through neural network-based inference acceleration.

What’s more, the chips are designed to handle radiation and the rigors of launch, using a thick ceramic packaging.

In a call with analysts this morning, Su pointed to these kinds of specialized workloads as one of Xilinx’s strengths. “Xilinx has also built deep strategic partnerships across a diverse set of growing markets in 5G communications, data center, automotive, industrial, aerospace and defense. Xilinx is establishing themselves as a strategic technology partner to a broad set of industry leaders,” she said.

In a nod to shareholders of both companies, she said, “This is truly a compelling combination that will create significant value for all stakeholders, including AMD and Xilinx shareholders who will benefit from the future growth and upside potential of the combined company.”

So far stockholders aren’t impressed with AMD stock down over 4% in pre-trading, while Xilinx stock is up over 11% in pre-trading.  Xilinx has a market cap over $28 billion compared with AMD’s $96.5 billion, creating a massive combined company.

This deal comes on the heels of last month’s ARM acquisition by Nvidia for $40 billion. With two deals in less than two months totaling $75 million, the industry is looking at the bigger is better theory. Meanwhile Intel took a hit earlier this month after its earnings report showed weakness in its data center business.

While the deal has been approved by both company’s boards of directors, it still has to pass muster with shareholders and regulators, and is not expected to close until the end of next year.

When that happens Su will be chairman of the combined company, while Xilinx president and CEO, Victor Peng, will join AMD as president, where he will be in charge of the Xilinx business and strategic growth initiatives.


By Ron Miller

Splunk acquires Plumbr and Rigor to build out its observability platform

Data platform Splunk today announced that it has acquired two startups, Plumbr and Rigor, to build out its new Observability Suite, which is also launching today. Plumbr is an application performance monitoring service, while Rigor focuses on digital experience monitoring, using synthetic monitoring and optimization tools to help businesses optimize their end-user experiences. Both of these acquisitions complement the technology and expertise Splunk acquired when it bought SignalFx for over $1 billion last year.

Splunk did not disclose the price of these acquisitions, but Estonia-based Plumbr had raised about $1.8 million, while Atlanta-based Rigor raised a debt round earlier this year.

When Splunk acquired SignalFx, it said it did so in order to become a leader in observability and APM. As Splunk CTO Tim Tully told me, the idea here now is to accelerate this process.

Image Credits: Splunk

“Because a lot of our users and our customers are moving to the cloud really, really quickly, the way that they monitor [their] applications changed because they’ve gone to serverless and microservices a ton,” he said. “So we entered that space with those acquisitions, we quickly folded them together with these next two acquisitions. What Plumbr and Rigor do is really fill out more of the portfolio.”

He noted that Splunk was especially interested in Plumbr’s bytecode implementation and its real-user monitoring capabilities, and Rigor’s synthetics capabilities around digital experience monitoring (DEM). “By filling in those two pieces of the portfolio, it gives us a really amazing set of solutions because DEM was the missing piece for our APM strategy,” Tully explained.

Image Credits: Splunk

With the launch of its Observability Suite, Splunk is now pulling together a lot of these capabilities into a single product — which also features a new design that makes it stand apart from the rest of Splunk’s tools. It combines logs, metrics, traces, digital experience, user monitoring, synthetics and more.

“At Yelp, our engineers are responsible for hundreds of different microservices, all aimed at helping people find and connect with great local businesses,” said Chris Gordon, Technical Lead at Yelp, where his team has been testing the new suite. “Our Production Observability team collaborates with Engineering to improve visibility into the performance of key services and infrastructure. Splunk gives us the tools to empower engineers to monitor their own services as they rapidly ship code, while also providing the observability team centralized control and visibility over usage to ensure we’re using our monitoring resources as efficiently as possible.”


By Frederic Lardinois

Juniper Networks acquires Boston-area AI SD-WAN startup 128 Technology for $450M

Today Juniper Networks announced it was acquiring smart wide area networking startup 128 Technology for $450 million.

This marks the second AI-fueled networking company Juniper has acquired in the last year and a half after purchasing Mist Systems in March 2019 for $405 million. With 128 Technology, the company gets more AI SD-WAN technology. SD-WAN is short for software-defined wide area networks, which means networks that cover a wide geographical area such as satellite offices, rather than a network in a defined space.

Today, instead of having simply software-defined networking, the newer systems use artificial intelligence to help automate session and policy details as needed, rather than dealing with static policies, which might not fit every situation perfectly.

Writing in a company blog post announcing the deal, executive vice president and chief product officer Manoj Leelanivas sees 128 Technology adding great flexibility to the portfolio as it tries to transition from legacy networking approaches to modern ones driven by AI, especially in conjunction with the Mist purchase.

“Combining 128 Technology’s groundbreaking software with Juniper SD-WAN, WAN Assurance and Marvis Virtual Network Assistant (driven by Mist AI) gives customers the clearest and quickest path to full AI-driven WAN operations — from initial configuration to ongoing AIOps, including customizable service levels (down to the individual user), simple policy enforcement, proactive anomaly detection, fault isolation with recommended corrective actions, self-driving network operations and AI-driven support,” Leelanivas wrote in the blog post.

128 Technologies was founded in 2014 and raised over $97 million, according to Crunchbase data. Its most recent round was a $30 million Series D investment in September 2019 led by G20 Ventures and The Perkins Fund.

In addition to the $450 million, Juniper has asked 128 Technology to issue retention stock bonuses to encourage the startup’s employees to stay on during the transition to the new owners. Juniper has promised to honor this stock under the terms of the deal. The deal is expected to close in Juniper’s fiscal fourth quarter subject to normal regulatory review.


By Ron Miller

Twilio is buying customer data startup Segment for between $3B and $4B

Sources have told TechCrunch that Twilio intends to acquire customer data startup Segment for between $3 and $4 billion. Forbes broke the story on Friday night, reporting a price tag of $3.2 billion.

We have heard from a couple of industry sources that the deal is in the works and could be announced as early as Monday.

Twilio and Segment are both API companies. That means they create an easy way for developers to tap into a specific type of functionality without writing a lot of code. As I wrote in a 2017 article on Segment, it provides a set of APIs to pull together customer data from a variety of sources:

Segment has made a name for itself by providing a set of APIs that enable it to gather data about a customer from a variety of sources like your CRM tool, customer service application and website and pull that all together into a single view of the customer, something that is the goal of every company in the customer information business.

While Twilio’s main focus since it launched in 2008 has been on making it easy to embed communications functionality into any app, it signaled a switch in direction when it released the Flex customer service API in March 2018. Later that same year, it bought SendGrid, an email marketing API company for $2 billion.

Twilio’s market cap as of Friday was an impressive $45 billion. You could see how it can afford to flex its financial muscles to combine Twilio’s core API mission, especially Flex, with the ability to pull customer data with Segment and create customized email or ads with SendGrid.

This could enable Twilio to expand beyond pure core communications capabilities and it could come at the cost of around $5 billion for the two companies, a good deal for what could turn out to be a substantial business as more and more companies look for ways to understand and communicate with their customers in more relevant ways across multiple channels.

As Semil Shah from early stage VC firm Haystack wrote in the company blog yesterday, Segment saw a different way to gather customer data, and Twilio was wise to swoop in and buy it.

Segment’s belief was that a traditional CRM wasn’t robust enough for the enterprise to properly manage its pipe. Segment entered to provide customer data infrastructure to offer a more unified experience. Now under the Twilio umbrella, Segment can continue to build key integrations (like they have for Twilio data), which is being used globally inside Fortune 500 companies already.

Segment was founded in 2011 and raised over $283 million, according to Crunchbase data. Its most recent raise was $175 million in April on a $1.5 billion valuation.

Twilio stock closed at $306.24 per share on Friday up $2.39%.

Segment declined to comment on this story. We also sent a request for comment to Twilio, but hadn’t heard back by the time we published.  If that changes, we will update the story.


By Ron Miller

SAP continues to build out customer experience business with Emarsys acquisition

SAP seemed to be all in on customer experience when it acquired Qualtrics for $8 billion in 2018. It continued on that journey today when it announced it was acquiring Austrian cloud marketing company Emarsys for an undisclosed amount of money.

Emarsys, which raised over $55 million, according to PitchBook data, gives SAP customer personalization technology. If you talk to any marketing automation vendor over the last several years, the focus has been on using a variety of data and touch points to understand the customer better, and deliver more meaningful online experiences.

With the pandemic closing or limiting access to brick and mortar stores, personalization has taken a new urgency as customers are increasingly shopping online and companies need to meet them where they are.

With Emarsys, the company is getting an omnichannel marketing solution that they say is designed to deliver messages to customers wherever they are including e-mail, mobile, social, SMS, and the web, and deliver that at scale.

When SAP announced it was spinning out Qualtrics a couple of months ago, just 20 months after buying, it left some question about whether SAP was fully committed to customer experience business.

Brent Leary, founder and principal analyst at CRM Essentials says that the acquisition shows that SAP is still very much in the game. “This illustrates that SAP is serious about CX and competing in a highly competitive space. Emarsys adds industry-specific customer engagement capabilities that should help SAP CX customers accelerate their efforts to provide their customers with the experiences they expect as their needs change over time,” Leary told TechCrunch.

As an ERP company at its core, SAP has traditionally focused on back office kind of operations, but Bob Stutz, president, SAP Customer Experience sees this acquisition as a way to continue bringing back office and front office operations together.

“With Emarsys technology, SAP Customer Experience solutions can link commerce signals with the back office and activate the preferred channel of the customer with a relevant and consistently personalized message, allowing customers the freedom to choose their own engagement,” Stutz said in a statement.

The company, which is based in Austria, was founded back in 2000 when marketing was a very different world. It has built a customer base of 1500 companies with 800 employees in 13 offices across the globe. All of this will become part of SAP, of course and come under Stutz’s purview.

As with all transactions of this type it will be subject to regulatory approval, but the deal is expected to close this quarter.


By Ron Miller

Selling a startup can come with an emotional cost

Every founder dreams of building a substantial company. For those who make it through the myriad challenges, it typically results in an exit. If it’s through an acquisition, that can mean cashing in your equity, paying back investors and rewarding long-time employees, but it also usually results in a loss of power and a substantially reduced role.

Some founders hang around for a while before leaving after an agreed-upon time period, while others depart right away because there is simply no role left for them. However it plays out, being acquired can be an emotional shock: The company you spent years building is no longer under your control,

We spoke to a couple of startup founders who went through this experience to learn what the acquisition process was like, and how it feels to give up something after pouring your heart and soul into building it.

Knowing when it’s time to sell

There has to be some impetus to think about selling: Perhaps you’ve reached a point where growth stalls, or where you need to raise a substantial amount of cash to take you to the next level.

For Tracy Young, co-founder and former CEO at PlanGrid, the forcing event was reaching a point where she needed to raise funds to continue.

After growing a company that helped digitize building plans into a $100 million business, Young ended up selling it to Autodesk for $875 million in 2018. It was a substantial exit, but Young said it was more of a practical matter because the path to further growth was going to be an arduous one.

“When we got the offer from Autodesk, literally we would have had to execute flawlessly and the world had to stay good for the next three years for us to have the same outcome,” she said at a panel on exiting at TechCrunch Disrupt last week.

“As CEO, [my] job is to choose the best path forward for all stakeholders of the company — for our investors, for our team members, for our customers — and that was the path we chose.”

For Rami Essaid, who founded bot mitigation platform Distil Networks in 2011, slowing growth encouraged him to consider an exit. The company had reached around $25 million run rate, but a lack of momentum meant that shifting to a broader product portfolio would have been too heavy a lift.


By Ron Miller