Managed Services

Atlassian to Acquire Loom for $975M

Credit: Getty Images

Atlassian Corp. has announced plans to acquire Loom, a widely-used video messaging platform for approximately $975 million.

This is technology M&A deal number 282 that ChannelE2E and MSSP Alert have covered so far in 2023. See more than 2,000 technology M&A deals for 2023, 2022, 2021, and 2020 listed here.

Atlassian, founded in 2002, is headquartered in Sydney, Australia. The company has over 20,500 employees listed on LinkedIn. Atlassian's areas of expertise include team collaboration, productivity software, and a suite of products such as Jira Software, Confluence, Jira Service Management, Trello, Bitbucket, and Jira Align.

Loom, established in 2016, is based in San Francisco, California. The company has 270 employees listed on LinkedIn. Loom’s platform specializes in instant video messaging, offering features such as screen recording, camera integration, AI-driven titles, summaries, chapters, tasks, and translations in more than 50 languages.

Details of the Transaction

The acquisition comprises approximately $880 million in cash and the remaining in Atlassian equity awards, with vesting provisions still in place. Atlassian intends to finance the cash consideration through its existing cash reserves, with the acquisition not anticipated to influence the company’s share repurchase strategy.

Both parties expect the transaction to be finalized in the third quarter of Atlassian’s fiscal year 2024, pending standard closing conditions and necessary regulatory consent. The purchase is projected to slightly dilute non-GAAP operating margins for fiscal years 2024 and 2025.

Increased Team Collaboration Through Video Messaging

The acquisition comes amid the increasing global shift towards remote and distributed work. Asynchronous video, such as that provided by Loom, has gained momentum as a leading solution for teams working from varied locations.

Atlassian aims to provide a more enhanced collaboration experience by integrating Loom. This will empower engineers to visually log issues in Jira, enable leaders to connect via videos, allow sales teams to offer personalized video updates, and assist HR with onboarding employees with tailored welcome messages.

Moreover, the confluence of AI investments from both companies will provide users with a seamless transition between different formats such as video, video transcripts, documents, and their subsequent workflows, thus diversifying ways for teams to collaborate.

Loom users can expect amplified benefits from Atlassian's vast platform and product portfolio, facilitating video integration into primary workflows in tools like Jira and Confluence.

Atlassian Acquires Loom: Executive Insight

Mike Cannon-Brookes, co-founder and co-CEO of Atlassian, commented:

"Async video is the next evolution of team collaboration, and teaming up with Loom helps distributed teams communicate in deeply human ways."

Joe Thomas, co-founder and CEO of Loom, said:

"Loom’s vision is to empower everyone at work to communicate more effectively wherever they are, and by joining Atlassian, we can accelerate their mission to unleash the potential of every team. We’re excited to weave video into collaboration in a way that only Loom plus Atlassian can."