Lounge, a team communication startup that was looking to reimagine the future of work with features designed for remote and distributed workforces, has now found an exit after Slack entered its same market last year with competitive voice and video tools. Launched by former Life360 employees last year, Lounge confirmed it’s been acquired for an undisclosed sum by Pulse — another company building technology aimed at improving remote worker productivity, but specifically through features that automate updates to users’ Slack status via a combination of AI and custom rules.
Pulse was founded by Raj Singh, who has already had multiple exits, including to companies like Salesforce. In particular, Pulse was attracted to Lounge’s ideas around team-building activities for remote workers.
That was only a subset of what Lounge had offered, however. Its service was a more expansive platform with features like message boards, audio chat, group audio and visual representations of typical corporate office spaces — like employee desks, conference rooms and even break rooms. On top of this, it had built features designed to help remote workers connect and get to know one another, like photo-sharing tools and support for company-wide events — like steps or meditation challenges, for example.
According to Lounge CEO Alex Kwon, despite his startup’s unique features, it struggled against the lock-in and network effect of mainstream remote work platforms, like Slack and Microsoft Teams. But the final bullet was Slack’s introduction of Huddle, its own lightweight audio networking feature that effectively took aim at one of Lounge’s biggest selling points — drop-in voice chats.
Initially, Lounge decided to pivot to focus more on asynchronous team-building activities with deeper Slack integration.
Kwon says Singh later reached out to him and explained how Pulse aimed to become a platform for displaying the status of each team member right inside Slack, where they’re already working — as opposed to having employees use a whole new platform like Lounge. Pulse was also looking to expand its solution to other workplace apps, like Microsoft Teams, Google Workspace and even Discord. Both parties agreed that establishing team-building activities as a social layer for this existing offering could make sense. It also served Lounge’s original vision to make remote teams feel closer.
“Raj is an experienced entrepreneur in the B2B space with a previous exit to Salesforce, so the acquisition conversation became a natural next step for us,” notes Kwon.
Pulse aims to use Lounge’s asynchronous team-building activities like its Steps challenge and Team photos feature as the social roadmap for Pulse’s ambient status updater right inside Slack, Kwon says. You could imagine, then, how companywide team-building challenges could be turned into Slack status updates the same way Pulse today updates your status based on the apps you use — like Zoom, Google Meet, Skype, Slack Huddles, etc. — and your calendar, working hours and more.
As a result of the acquisition, Kwon is the only Lounge member joining Pulse, and only as a part-time product adviser — a signal the acquisition was more about the tech than talent.
Deal terms weren’t revealed but we understand it to be more stock than cash, implying a smaller exit.
Lounge had raised $1.2 million in funding from investors including Unusual Ventures, Hustle Fund, Translink, Unpopular Ventures and other angels.