Atlassian bets big on remote work with $1.5b acquisition

Australian productivity software giant Atlassian has announced it’s acquiring former tech unicorn Loom, a US-based pioneer in enterprise video chat and screen recording, for $US975 million ($1.5 billion).

Founded in 2016, Loom began as a web-based tool to record a user’s face and screen simultaneously, and it eventually became a popular way for geographically distributed companies to implement asynchronous video; that is, for people to send messages to their colleagues that they could reply to in their own time, as an alternative to real-time conferences.

Atlassian co-CEOs Mike Cannon-Brookes and Scott Farquhar.Credit: Louie Douvis

The company boomed during the pandemic; its website boasts clients including Tesla, Disney, Amazon, Goldman Sachs and more. In May 2021, it had a valuation of $US1.53 billion, as it announced a $US130 million series C funding round led by venture capital firm Andreessen Horowitz.

Yet while the valuation of Loom has gone down since then, the acquisition is still Atlassian’s biggest to date. Co-founder and billionaire Mike Cannon-Brookes – who is co-CEO of Atlassian with fellow billionaire Scott Farquhar – made the announcement in a Loom video, and said the company planned to integrate the technology into its cloud-based products.

“With the continued growth of distributed work, Loom helps bridge the collaboration gaps for dispersed teams in deeply human ways,” he said.

“We believe that asynchronous video and AI will drive the next evolution of team collaboration. And the combined strengths of Loom and Atlassian can deliver some amazing products in these areas.”

Mike Cannon-Brookes announces Atlassian’s acquisition of Loom, on Loom.

Loom offers a limited free version as well as paid tiers for businesses and enterprises. Videos can be embedded in websites and can contain links and other media, while titles, transcripts, summaries and tasks are generated by AI. Atlassian plans to continue to run Loom as a dedicated product as well as integrate it into the likes of Jira and Confluence.

In a press release, the two companies said their combined investments in AI would supercharge asynchronous video so users could move seamlessly between recorded clips, transcripts, summaries documents and workflows, making it easy for them to collaborate with others even in different time zones.

“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,” said Loom co-founder Joe Thomas.

“We’re excited to weave video into collaboration in a way that only Loom and Atlassian can.”

Atlassian plans to fund the purchase almost entirely from its existing cash reserves, with the addition of around $US100 million in equity awards, and said it should be completed in the quarter ending in March 2024.

Atlassian has remained a champion of remote and flexible work even as many companies return to full-time office mandates.

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