Facebook Nears Purchase of Startup in Deal That Values It at $1 Billion--Update
November 30 2020 - 11:36AM
Dow Jones News
By Cara Lombardo and Dana Cimilluca
Facebook Inc. is nearing a deal to buy Kustomer, a startup that
specializes in customer-service platforms and chatbots, according
to people familiar with the matter.
The deal, which could be completed as soon as Monday afternoon
assuming talks don't fall apart, would value New York-based
Kustomer at a little over $1 billion, the people said. Closely held
Kustomer was valued at $710 million in a private funding round
roughly a year ago, according to PitchBook.
Kustomer already has a relationship with Facebook. Its offerings
allow companies to aggregate and respond to customer inquiries that
come in through Facebook Messenger. In October, Kustomer said it
also began integrating with Facebook's Instagram messaging.
Facebook, which has been in the spotlight for its handling of
political and other content on its platform, has been making a big
push into what Chief Executive Mark Zuckerberg has called "social
commerce." This deal could further that effort. In May, the
social-media giant launched Facebook Shops, which lets companies
create online stores through Facebook and Instagram.
Kustomer was founded in 2015 by Brad Birnbaum and Jeremy Suriel,
two entrepreneurs who sold a previous company to Salesforce.com
Inc. Kustomer's investors include Coatue Management and Tiger
Global Management.
Facebook, which has a market value of over $790 billion, has a
long history of deal making, having purchased over 100 companies,
according to FactSet. Its highest-profile acquisitions include
paying around $1 billion for Instagram in 2012 -- a far cry from
what the popular photo- and video-sharing platform is likely worth
now -- and around $19 billion for WhatsApp in 2014. In May, it
bought Giphy, an online platform where users can search for
animated photos known as GIFs, for around $400 million.
Write to Cara Lombardo at cara.lombardo@wsj.com and Dana
Cimilluca at dana.cimilluca@wsj.com
(END) Dow Jones Newswires
November 30, 2020 11:21 ET (16:21 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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