Salesforce is continuing its buying spree to expand the kinds of cloud-based apps and services that it offers to its customers beyond basic CRM. The company has just announced that it is acquiring Quip, the cloud-based word processing app that was co-founded by Bret Taylor, formerly CTO of Facebook. We understand from two sources very close to the deal that the total price is $750 million.
That includes cash and shares, as Salesforce’s 8-K that it just filed on the deal notes “Quip capital stock with an aggregate value of approximately $582 million not including consideration attributable to Salesforce Ventures’ existing investment in Quip.”
Quip was founded in 2012 and had raised $45 million in funding, with other investors (in addition to Marc Benioff and Salesforce Ventures) including Peter Fenton and Benchmark, Greylock, and Yuri Milner. Quip already counts several key companies, including Taylor’s former company Facebook, among its customers.
In a blog post announcing the news, Quip notes that it will continue to operate its business, but now under Salesforce. We understand that Taylor and his co-founder, ex-Googler Kevin Gibbs, will both be staying on post-acquisition.
“We’re inspired by the possibilities ahead of us. As part of Salesforce, we will be able to expand our service more quickly and reach millions of people all over the world — which has been our mission since day one,” they write. “And, we’ll be able to extend the Salesforce Customer Success Platform in powerful new ways with our next-generation productivity capabilities. The possibilities of mixing data, content and communication are amazing.”
It’s not clear why Quip — which was growing and in the enviable position of being very selective about taking funding from VCs — decided to sell up to Salesforce. But it’s an interesting turn in the ongoing consolidation that we’ve seen in the enterprise market, and how that is transforming the bigger companies that are doing the buying.
Salesforce, as we now know, had tried to acquire LinkedIn earlier this year before the social networking company made the $26 billion jump into the arms of Microsoft. While Salesforce and Microsoft sometimes work together, they also compete, and adding Quip into the mix at Salesforce could one way for Salesforce to do that better (and counterbalance the fact that Microsoft is building and acquiring more products that compete with Salesforce on the CRM front).
Quip, when it first launched as a mobile-only native app (it now has a desktop and web version), was described by my colleague Josh as a timely disruptor to the clumsy and very incumbent Microsoft Word.
Salesforce could do enough just to offer this, as it is, as part of its wider portfolio of productivity services to tempt more customers to its platform, and away from Microsoft’s. But considering the price that it is paying, and the fact that the Quip team is joining as part of the deal, I suspect they could be aiming to do something even bigger.
(Whether or not it will work is another question: one sticky point with Salesforce has been how the company integrates acquisitions. They are often bolted on, rather than truly brought together, is how it’s been described to me, so it will be worth watching to see how Quip fares on that front.)
In any case, Taylor has had a pretty eventful summer. Quip’s acquisition comes about a month after he joined the board of Twitter.