Atlassian set to acquire video messaging giant Loom for $975m

In a game-changing move for the collaboration software market, Atlassian Corporation (NASDAQ: TEAM), renowned for its team collaboration and productivity software solutions, has declared a decisive agreement to purchase Loom, the video messaging phenomenon that has garnered a staggering 25 million users. Loom, which has notably secured a position among Fast Company’s World’s Most Innovative companies of 2023, offers a glimpse into the future of asynchronous (async) video communication.

As remote work continues to reshape the global workspace, the demand for groundbreaking tools to support distributed teams is surging. Emphasizing the significance of async video, Loom’s platform witnesses a whopping nearly five million video recordings monthly by business professionals. Mike Cannon-Brookes, Atlassian’s co-founder and co-CEO, envisions async video as “the next evolution of team collaboration,” reinforcing the belief that the Loom acquisition will empower teams with a more genuine communication experience.

With an impressive roster of over 260,000 customers, Atlassian stands as a trusted beacon in the realm of team management. Integrating Loom promises to catapult this collaboration experience to an unparalleled level. A few potential applications include engineers utilizing video to log Jira issues, leaders employing video for expansive team engagement, sales representatives dispatching video updates tailored for clients, and HR departments offering personalized video welcomes for newcomers.

Augmented with AI investments from both Atlassian and Loom, customers can anticipate a fluid crossover between video content, transcriptions, summaries, documentations, and the consequent workflows—enriching multifaceted collaboration avenues. This union promises Loom’s users amplified advantages through Atlassian’s expansive platform and product suite. As Joe Thomas, Loom’s co-founder and CEO puts it, this integration means to “weave video into collaboration” in an unprecedented manner.

Transaction Details

• Acquisition Amount: Approximately $975 million, inclusive of Loom’s existing cash balance.
• Payment Mode: Predominantly cash ($880 million) and the rest in Atlassian equity awards.
• Closing Timeframe: Expected in the third quarter of Atlassian’s fiscal year 2024.
• Financial Implications: Likely slight dilution to non-GAAP operating margins in 2024 and 2025.

Loom at a Glance

Launched in 2016, Loom has transformed video messaging by enabling users to effortlessly document and share video content, encapsulating desktop recordings, camera, and voice. This intuitive platform ensures wide accessibility with transcriptions available in over 50 languages and AI-driven features like titles, summaries, and tasks. Sharing a vision and ethos akin to Atlassian, Loom boasts a clientele of over 200,000 customers.