Why Atlassian Is Buying Loom For Nearly $1 Billion

By Amit Chowdhry ● Oct 13, 2023

Atlassian – a leading provider of team collaboration and productivity software – recently announced it has entered into a definitive agreement to acquire Loom. This video messaging platform amassed over 25 million users. This global movement towards distributed work has driven a need for new ways to help teams collaborate when they are not in the same location or even the same hemisphere. And asynchronous (async) video has been at the forefront of this movement, with Loom’s business users recording nearly 5 million videos monthly.

Atlassian has expertise in how teams work. And it is already the go-to place for more than 260,000 customers who plan, track, and get work done, and the addition of Loom will further elevate the collaboration experience for teams. Engineers will soon be able to visually log issues in Jira; leaders can use videos to connect with employees at scale; sales teams will be able to send tailored video updates to clients, and HR teams can onboard new employees with personalized welcome videos.

Plus, by integrating Atlassian’s and Loom’s investments in AI, customers can seamlessly transition between video, video transcripts, summaries, documents, and the workflows developed from them, providing multiple ways for teams to connect and collaborate.

For Loom customers, the deal will benefit Atlassian’s platform and portfolio of products, allowing users to plug async video directly into key workflows in Jira and systems of record in Confluence.

Details Of The Deal

Under the terms of the deal, Atlassian will acquire Loom for about $975 million, including Loom’s cash balance, subject to customary adjustments. And the total consideration will be comprised of about $880 million in cash and the remainder in Atlassian equity awards, subject to continued vesting provisions.

Atlassian plans to fund the cash consideration through existing cash balances, and the deal is not expected to impact the company’s share repurchase strategy.

The deal is expected to close in the third quarter of Atlassian’s fiscal year 2024, subject to customary closing conditions and required regulatory approval. And the acquisition is expected to be slightly dilutive to non-GAAP operating margins in fiscal years 2024 and 2025.

KEY QUOTES:

“Async video is the next evolution of team collaboration, and teaming up with Loom helps distributed teams communicate in deeply human ways.”

— Mike Cannon-Brookes, co-founder and co-CEO of Atlassian

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

— Joe Thomas, co-founder and CEO of Loom