AppDirect, a company that helps customers manage multiple cloud vendors, announced today it was buying former Startup Battlefield participant Xendo for an undisclosed amount.
Xendo, which launched at TechCrunch Disrupt in September, 2014 enables users to conduct federated searches across cloud services, a function that could prove quite useful for AppDirect. In fact, AppDirect CEO Daniel Saks says one of the reasons he sought to buy the company is he was using the product on a daily basis.
AppDirect has a unique way of incorporating its acquired companies. It lets them continue to operate as before as semi-autonomous entities with the same team, CEO and customers, even while incorporating the core functionality into the AppDirect cloud management platform.
“We bring on motivated tech founders with a great product, plug [their products] into our platform and give them the breadth of out distribution,” Saks said.
The approach gives the acquired company access to AppDirect’s resources, while continuing to build the company as before. “We wanted to tap into the passion of these founders and keep it going. They continue to operate as CEOs with little hands-on management [from us]. We saw them as great leaders. We’re making an investment in an independent company, and with our size can help accelerate that vision,” Saks explained
This was one of the primary reasons Xendo was willing to sell so early, according to CEO and co-founder Julian Gay. His company can continue to build on its ideas, keeping its existing customers, while getting access to a bigger company’s engineering and design resources, as well as sales, marketing and other functions a young startup would otherwise need to develop or contract on its own.
Xendo’s concept extends far beyond pure search into a kind of cloud graph of connections across different services. “It actually enables a bigger vision, which is yes, at its foundation search, but using access to content as a way to derive insights which are latent in textual content. We want to derive more difficult relationships between people, locations and so forth.” Gay told TechCrunch.
AppDirect sees this broader vision as a key element as it incorporates Xendo’s technology into its platform.
Xendo customers, which include Netflix, Looker, Intersection (an Alphabet subsidiary) and AppDirect itself should be pleased because the company will continue to operate as before. Contrast that with Cisco’s purchase of Synata earlier this month in which Cisco simply shut down the company and plans to incorporate the search technology into its Spark communications platform.
This is the sixth purchase for AppDirect, which has raised more than $245 million so far. Others include Radialpoint, AppCarousel, Leftronic, Standing Cloud and jBilling.
As for Xendo, it’s raised just $28,000 in seed money, so it was really early in its development. All 7 Xendo employees will become part of AppDirect.