Answers.com Acquires E-Commerce Company Webcollage For $37 Million
Last week Answers.com signed an agreement to acquire a cloud-based software company that lets you update marketing materials from retail shop websites called Webcollage. The deal is worth around $37 million, but some investors actually lost money in the deal. Over the last few years, Webcollage raised around $50 million in funding.
Answers.com was acquired by a private equity fund called ACVF in February 2011. ACVF closed down Answer.com’s Israeli development center less than one year after the acquisition took place. Answers.com is expected to open a new development center in Israel following the acquisition. Webcollage will become a new arm of Answers.com that will focus on the development of a software-as-a-service platform. Webcollage’s 50 employees are expected to receive an offer to work in Answers.com’s new development center.
Eli Singer, Eilon Reshef, and Gil Tayar founded Webcollage in 1999. The company raised a seed round of funding right before the dot-com bust. Webcollage raised around $48.6 million in additional funding from investors like Sierra Ventures, IT Glide, GSI, Cedar Fund, and Greylock Israel since launching. Webcollage had over 1,000 customers during the time of the acquisition including Hewlett Packard, Microsoft, and Cisco.
“Although we have not gained in this deal, we mitigated our losses more than we expected we would. When we first invested it was in a world where Enterprise Services was hot,” stated Cedar Fund partner Amnon Shoham in an interview with Geektime (via TheNextWeb).