Microsoft acquires, OKR startup that raised $76 million

Microsoft announced today that it has acquired, a software service that helps companies measure their progress against OKRs (objectives and key results), a common way that management measures both individual and company progress. The two firms did not share the purchase price.

Microsoft plans to incorporate Ally into its Viva family of employee experience products. Microsoft says the idea behind Viva and the Ally acquisition is to provide a more transparent way to communicate company goals and objectives to employees.

“Aligning employee work to the company’s strategic mission and core priorities is top of mind for every organization. To do this, leaders need to invest in tools that communicate transparency around big company bets and create ways to cascade aspirational goals and report results at all levels of an organization,” Kirk Koenigsbauer, chief operating officer & corporate vice president in charge of experiences and devices wrote in a blog post announcing the deal.

As for Ally, CEO and founder Vetri Vellore says that this will enable his company to grow the product much more quickly as part of Microsoft than he could have on his own. “As a part of Microsoft Viva, will continue to give leaders, teams and individuals the ability to align and focus everyday work to the company’s most important objectives. We will help bring goals and purpose to wherever the team is doing work including Teams, Outlook, Slack and the other systems you use every day,” Vellore wrote in a blog post on the Ally website.

Understanding your work objectives and how they fit with the broader company goals has become even more important in an age when many more people are working at home and aren’t sitting in face-to-face meetings with management. Having those goals and expectations laid out and incorporated into the work tools people are using as remote employees should help keep everyone on track and pointed in the same direction.

While Microsoft declined to share the price of the transaction, PitchBook data indicates that Ally last raised capital at a $345 million post-money valuation. That price was set when the company raised $50 million earlier this year for a total of $76 million raised.

The exit of Ally to Microsoft could signal the start of a round of consolidation in the OKR-focused software market. There are many players competing for the lead, including WorkBoard, Koan, Gtmhub, Perdoo and WeekDone.

As a startup cohort, they have done incredibly well in terms of attracting venture capital and growing early-stage revenues. And now with an exit under their belt, the collection of companies will have to choose to keep their venture-funded approach to growth intact or shift to dual-tracking private rounds with possible exits to mega-tech companies.

With Microsoft buying Ally, which is also headquartered in Washington state, it could set the stage for other major platform players to buy and offer similar tooling. It’s not impossible to imagine any of the other usual acquisitive suspects — from Salesforce to ServiceNow to SAP — considering making a similar move and plucking one of these properties off the market.

For now though, just Ally is off the board, and we will have to watch to see how the rest of the market develops as a result of this move.