LinkedIn Competitor XING Buys Glassdoor-like Startup Kununu For $12.3M, But Will It Fare Well?

The German market for startups never ceases to amaze me. While many European startups struggle with either internal markets that are too small or international markets that are pretty daunting, the German ecosystem rattles along pretty well, given that with Germany, Austria and Switzerland you have a potential market of about 100 million German-speaking consumers. Thus it is that a small startup like kununu – a German-based equivalent of Glassdoor, the employer reviewing service – can exit relatively easily to a larger player like XING, a LinkedIn-like company that managed to float on the German exchange some years ago. The acquisition is for up to €9.4 million ($12.3 million). At 3 million page impressions per month, kununu is not exactly that big – but crucially, it’s big in the German market. XING is paying out €3.6 million, with an additional sweetener of €5.8 million based on performance to 2015. Founders Martin and Mark Poreda and all 30 staff are staying on.

Founded in 2007, Vienna-based kununu lets people rate their jobs and their company, and thus selling that data back to the companies themselves, not unlike the US-based Glassdoor. The service is live in Germany, Austria and Switzerland, and claims to carry 250,000 reviews. XING has already partnered with kununu for the last two years.

Thomas Vollmoeller, XING’s CEO, says he wants to use kununu to “boost our position within this growth market” given that “public employer reviews by their employees render long-term employer branding as absolutely essential.”

XING’s strategy has been to studiously avoid a face-off with LinkedIn for years. It’s big in Germany and has decided to expand in Asia via a number of local acquisitions, mainly in China.

But XING’s continuing problem however is globalisation. The more business people travel, the more business networks which reach across borders, like LinkedIn, become more useful. Plus, XING has failed to work on on its products constructively, letting the platform languish, even as LinkedIn has supercharged it’s platform and API operations.

Other XING acquisitions have not fared that well either, as the experience with Amiando, the ticketing platform has shown. The service is solid, but lack innovation.

It’s to be hoped the same fate does not await kununu.