Facebook to Acquire Kustomer in Deal That Values Startup at $1 Billion -- 2nd Update
By Cara Lombardo and Dana Cimilluca
Facebook Inc. said it would buy Kustomer, a startup that
specializes in customer-service platforms and chatbots, part of an
effort by the social-media giant to help companies use its
platforms to do business.
Facebook announced the deal in a posting Monday, confirming an
earlier report by The Wall Street Journal. Though terms weren't
disclosed, people familiar with the matter said it would value New
York-based Kustomer at a little over $1 billion.
Closely held Kustomer, whose technology takes conversations from
different channels and puts them on a single screen, was valued at
$710 million in a private funding round roughly a year ago,
according to PitchBook.
Increasingly, customers are communicating with companies by
messaging instead of calling. Every day, more than 175 million
people reach out to businesses using WhatsApp, Facebook said in the
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
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 -- far less than
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.
JPMorgan Chase & Co. was sole financial adviser to
Write to Cara Lombardo at email@example.com and Dana
Cimilluca at firstname.lastname@example.org
(END) Dow Jones Newswires
November 30, 2020 13:08 ET (18:08 GMT)
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