Zoom today announced plans to acquire Workvivo, a six-year-old Irish startup focused on improving internal communication and culture in companies. Terms of the deal were not disclosed.
While many enterprise communication tools – such as Zoom – specialize in real-time communication, Workvivo is all about asynchrony. The platform is less about project-based collaboration than encouraging broad-based employee engagement, including an activity feed, people directory, surveys, and critical company communication lines—much like the modern Internet.
In the year Founded in 2017 from Cork, Workvivo has amassed an impressive portfolio of clients including Amazon, RyanAir and Bupa. The company has raised nearly $40 million since its inception, including a $22 million Series B round led by existing investor Tiger Global last year. Interestingly, it also received an angel investment from Zoom founder, chairman and CEO Eric Yuan in 2019, which makes today’s announcement perhaps a little surprising.
Image Credits: Workvivo
Boom times
Workvivo is right when it says the remote work revolution fueled by the global pandemic has seen 200% growth in ARR (Annual Recurring Revenue) by 2020. And that seems to be the main reason he chose Zoom. To buy Workvivo. In today’s announcement, he said businesses today must “think differently” to retain talent and build a strong company culture.
“Today’s workforce is hybrid and distributed — whether at home, in the office, at a remote location, on a retail floor or warehouse front, on an airplane as a pilot or flight attendant, a nurse in a healthcare clinic, or anything in between,” he wrote. Engaging employees in communication and driving culture isn’t just a ‘nice to have’ – it’s essential to success in today’s business environment.
While WorkVivo seemed to perform well during the outbreak, so did Zoom. The video communications giant had a market cap of $160 billion in mid-2020, but in subsequent years — like most tech companies — its valuation has returned to its baseline, back to around $20 billion before the pandemic. So Zoom announced in February that it would cut 15 percent of its workforce, affecting 1,300 people, with Yuan pointing to its rapid growth during the outbreak and the ensuing global economic crisis as the main reason. You are one.
Overall, although overall growth has slowed significantly, Zoom is still doing well, reporting a 4% year-over-year revenue increase in its most recent earnings report. But Zoom is being careful not to rest on its laurels, and with Zoom under its wing, Workvivo will give it a direct lifeline to big-name enterprise customers, as well as its product portfolio to truly support both existing and new customers. – Time and asynchronous communication tools.
Zoom is not particularly known for its M&A activity, with only four previous acquisitions under its name in its 12-year history. But when it buys a company, there’s usually a clear strategic line — for example, last year when conversational AI startup Solvvy forged its way into the lucrative customer service space.
Zoom said it expects the WorkVivo transaction to close in the first quarter of fiscal 2024, which basically means the end of next month. After that, there will be plans to integrate Workvivo’s features into Zoom itself, although there’s no word on what this will mean for Workvivo’s standalone platform in the long term.
WorkVivo co-founders John Goulding and Joe Lennon and the entire WorkVivo team will join Zoom once the deal closes.
A Zoom spokesperson told TechCrunch, “Our focus is on integrating Workvivo into the Zoom platform, and we look to optimize it in the future. Workvivo employees will transition to Zoomies.”
