Our earlier report about Critical Path buying mobile services startup ShoZu turns out to have been right on the money. Tomorrow morning, both companies will jointly announce that they have come to an agreement for Critical Path to acquire all of ShoZu for an undisclosed sum. We’re trying to get a hold of the price the London company, which was backed by $36 million in venture capital, sold for.
The release is below, but here are more details, including some deal terms:
- the asset purchase agreement was signed earlier today (4th of January)
- ShoZu investors will not retain any interest in the ShoZu assets or Critical Path
- ShoZu Chairman and CEO Chris Wade will be working with Critical Path in a consultative capacity for a limited time
- The rest of the ShoZu staff joined Critical Path on the date of closing
- There are no job losses on either side planned as a result of the acquisition
- Critical Path says it will continue to support the ShoZu platform for existing consumers and licensees
- Critical Path will demonstrate the first new offerings to come out of the deal at Mobile World Congress in Barcelona (week of 14 February 2010)
- Critical Path will continue to offer its Memova suite of applications to services providers and leading enterprises.
- Critical Path says it is committed to continuing to develop and enhance the ShoZu platform for individuals
ShoZu was founded back in 2001 and essentially enables people from around the work to connect with other people by exchanging video, pictures and commentary between mobile devices and social networks, photo sharing sites and information resources.
Critical Path’s Memova suite of applications and services is also built to let people communicate and share with each other, but its strategy consists of offering its software as a white-label solution for mobile carriers and ISPs rather than targeting consumers directly.
This marks the main difference between this deal and the other acquisition agreement that was announced today, namely that Seesmic has purchased Ping.fm.
All in all, it sounds like a great fit on a business and people level, but not exactly a financial home run for the 8-year old startup’s founders and investors. Lead investor SEB Venture Capital UK may be referring to this deal a ‘successful outcome’, but until we see what ShoZu’s price tag was we believe ShoZu sold for far less than its management and backers had hoped for.
Still, it’s a positive note for the UK startup scene, and a far better exit than ending up in the deadpool.
The full press release:
Dublin, IRELAND – January 5, 2010
Privately-held Critical Path, Inc., a leading provider of messaging software and services, today announced that it has purchased the business and assets of ShoZu Limited. The acquisition of ShoZu’s mobile social media services significantly advances Critical Path’s delivery of consumer-focused mobile and social networking solutions across the entire range of mobile platforms.
“The acquisition of ShoZu propels us forward in enriching our mobile and social networking solutions for our customers around the world”, said Critical Path CEO Mark Palomba. “Now, we can offer an unparalleled experience for people to connect and stay current on the most popular social networks using virtually any device as well as extend their use of personal media and messaging activities.”
There are substantial strategic customer advantages for both Critical Path and ShoZu customers from this acquisition. Critical Path has long been a leading provider of white-labeled messaging and consumer applications platforms to service providers, focused primarily on mass-market devices. ShoZu adds award-winning mobile applications for sharing media and personal experiences across the most popular social networks, with native support for the leading smartphone platforms. The combined set of capabilities provides consumers with a complete social networking and personal communications capability, ranging from the simplest mobile device to the most advanced.
“ShoZu has achieved broad recognition as an industry leader in connecting mobile consumers with popular social networks through their personal media”, said ShoZu Chairman and CEO, Chris J. Wade. “We are delighted that these capabilities will have the opportunity to reach a broader audience through Critical Path, as well as those customers who currently use and value ShoZu”.
ShoZu will continue to be supported across the full range of handsets, online stores and websites that it reaches today.
Further statement from ShoZu:
LONDON, January 5, 2010
ShoZu, issued the following statement in conjunction with news of today’s acquisition of the award-winning social media hub by Critical Path, Inc., a leading provider of messaging applications and enterprise solutions:
“We’re delighted to have found the perfect home for the ShoZu brand and service in Critical Path,” said Chris J. Wade, Chairman and CEO. “We couldn’t be more pleased with the seamless fit of our combined technology and approach to serving the market and the opportunity for our outstanding engineering team to continue to make important technical contributions to Critical Path going forward. We strongly believe in the roadmap for our future together serving Critical Path’s traditional customers, as well as new users attracted by the power of our combined applications. The acquisition of ShoZu by Critical Path really is a beneficial matchup for both companies — resulting in a powerful capability for elegantly sharing, communicating and collaborating on information that’s at the core of personal and business relationships.”
Nigel Pilkington, ShoZu Board Director from SEB Venture Capital UK, said: “We are very pleased with the transaction and delighted with Chairman Chris Wade’s role in creating and completing this agreement. Chris came in on a day-to-day basis at a critical juncture when he took on the additional responsibilities of CEO in June 2009 and very quickly managed the company to a successful outcome for us.”
Chris Wade concludes, “I also can’t speak highly enough about the support from the team at SEB Venture Capital UK, the lead investors in ShoZu, as well as the significant contribution from our communications agency, Comunicano, and its CEO, Andy Abramson.”