ServiceSource, which provides recurring revenue management software for businesses like Renew OnDemand, announced today that it has acquired Scout Analytics, a Seattle-based provider of predictive analytics for subscription businesses. The terms of the deal were $32 million in cash.
In a statement, ServiceSource says that these verticals “roughly doubles its addressable market to now over $600 billion in recurring revenue opportunities.” Scout Analytics’ current customers include the Financial Times and Reed Elsevier, as well as information services company Wolters Kluwer, which is also an existing client of ServiceSource.
Not everyone is happy with the deal, however. GeekWire reports that a group of series A preferred stockholders filed a suit last week alleging that Scout Analytics’ board failed to explore a counter financing offer by Catalyst Investors III that would have valued the company at $40 million. Both ServiceSource and Scout Analytics declined to comment on the lawsuit.
Scout Analytics manages more than $3.5 billion in recurring revenue, and ServiceSource says the acquisition will allow it to expand its business to $14 billion across more than 200 customers, tap into new markets, and offer recurring revenue management services to both subscription and traditional businesses.
Scout, one of Scout Analytics’ products, tracks customers’ subscription usage, spending, and other activity, and provides information that companies can use to improve account management, retain customers, and develop marketing strategies that to sell more services to users. ServiceSource said that recurring revenue will play a “pivotal role” into the Internet of Things as more people start using smart devices and cloud-based services.
Now that it has acquired Scout Analytics, ServiceSource has a new potential base of customers including consumer tech companies that operate on a recurring payment model. Scout Analytics currently analyzes usage from about 25 million subscribers on more than 400 million devices each day for customers in the software-as-a-service, information services, and digital media industries.
“Scout Analytics significantly expands our reach into the fast-growing SaaS market, while creating new opportunities in B2B subscriptions for information services and digital media. And, with the addition of sophisticated predictive analytics, we can give companies the required top-to-bottom view of their customers’ data to grow through recurring revenue,” said ServiceSource chairman and CEO Mike Smerklo in a statement.