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Atlassian Corp., a leading tech giant, is making a daring leap of faith with a massive $975M acquisition of the video-messaging startup, Loom. Not just any purchase, this represents the largest acquisition in Atlassian’s history, all with a clear vision – the future of work lies in remote collaboration and instruction.

  • Loom brings a lot to the table: Loom is a platform that allows the creation and sharing of screen-recorded videos. It’s a tool used for a multitude of tasks such as employee onboarding, code reviews, feedback sharing, document explanations, and all-hands meetings.
  • Word from the CEO: According to Atlassian Co-CEO, Mike Cannon-Brookes, Loom “aligns very much with our views about the future of work.”
  • Plans for Loom: Despite the shift in work schedules and time zones, Atlassian plans on keeping Loom as a standalone product while also integrating it further with Atlassian’s collaboration tools like Jira and Confluence.
  • The Deal: The magnitude of this deal is enormous. This Loom acquisition is as large as Atlassian’s last 20 acquisitions combined! The deal is set to close by March 2024 and could slightly impact Atlassian’s operating margins until June 2025.
  • Payment Method: Primarily a cash transaction with $880M in cash being used and the remaining in stock awards.
  • Additional Details: Atlassian has demonstrated confidence in its future prospects with a $1B stock buyback announced in February, unaffected by the acquisition. Despite having a slow revenue growth last year, the company’s recent earnings report looks promising, especially with future sales from cloud applications.
  • Background on Loom: Founded in 2016, Loom boasts over 200,000 customers with business growth amplified by the pandemic. In May 2021 they were valued at $1.53B. Unfortunately, Loom had to let go 14% of its workforce last year due to increased economic uncertainty. However, Loom’s CEO, Joe Thomas, remains optimistic about the video service’s future, with engagement metrics growing at a robust 50-60% per year.

Even as employees start returning to offices, Atlassian, an advocate of remote work, believes that companies with an in-office culture can also leverage the benefits of Loom. As we observe this tech gamble unfold, it’s clear that Atlassian is betting big on the future of remote collaboration.

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