In a significant development, Australian enterprise software leader Atlassian has unveiled a definitive agreement to acquire the asynchronous video messaging platform Loom for a substantial sum of $975 million. This strategic move marks a substantial expansion of Atlassian’s software portfolio, known for its work-centric collaboration tools like Jira, Confluence, and Trello. The acquisition aims to bring Loom’s capabilities into these existing products, ushering in new dimensions of collaboration and communication for distributed teams.
Loom’s Evolution in the Async Video Space
Founded in 2016 by Joe Thomas Jr., Shahed Khan, and Vinay Hiremath, Loom initially emerged as an end-to-end asynchronous video messaging platform, simplifying collaboration for enterprise users. Over the years, Loom has evolved, introducing new features such as browser extensions and integrations with popular platforms like Slack, Gmail, and Asana. It garnered over $200 million in funding through multiple rounds and achieved a valuation exceeding $1.5 billion following its series C round led by Andreessen Horowitz in 2021.
By the close of 2022, after the surge in remote work due to the pandemic, Loom boasted over 18 million users, representing more than 350,000 businesses. In 2023, the platform recorded over 7 million Loom recordings monthly, a substantial increase from the 1 million recorded in 2019. Additionally, Loom introduced several AI-based features, including transcription services supporting 50 languages and generative titles and summaries.
In contrast, Atlassian has a longstanding presence in the work collaboration sector, offering distinct platforms targeting various aspects of work. With a market capitalization exceeding $49 billion, Atlassian collaborates with numerous Fortune 500 companies and over 260,000 enterprises worldwide, including renowned names such as NASA, Kiva, Deutsche Bank, and Salesforce.
The Implications of the Atlassian-Loom Merger
With the integration of Loom into its ecosystem, Atlassian intends to enhance each of its products with built-in video capabilities, aiming to provide a superior experience for remote knowledge workers in planning, tracking, and executing their tasks. Mike Cannon-Brookes and Scott Farquhar, Atlassian’s co-founders, explained in a joint blog post that asynchronous video complements other modes of communication like text, presentations, and spreadsheets, and can revolutionize collaboration. The leadership in asynchronous video offered by Loom, combined with Atlassian’s expertise in team collaboration, sets the stage for innovation.
The integration will offer various benefits, including engineers visually logging issues in Jira, personalized video updates for clients from sales teams within their workflows, and tailored welcome videos for new employees by HR teams. Both companies will leverage their investments in AI to facilitate seamless transitions between video, transcripts, summaries, documents, and associated workflows.
The integration process is scheduled to commence following the closure of the deal, expected in the quarter ending March 2024. Importantly, Loom will continue to be available as a standalone product, ensuring continuity for its existing user base.
Atlassian is set to acquire Loom for $975 million, enhancing its work collaboration tools with integrated video capabilities. Loom’s asynchronous video expertise will empower Atlassian’s products, offering innovative ways for teams to collaborate. The integration, expected in Q1 2024, will leverage AI to seamlessly transition between video, transcripts, summaries, documents, and workflows. Loom will continue as a standalone product alongside Atlassian’s existing offerings.
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