San-Francisco-based Quip sparked rumors of a pending acquisition last year when it released multiple desktop apps targeting the enterprise workplace.
Here was a productivity start-up with an impeccable pedigree — co-founded by a former Facebook CTO Bret Taylor and his friend Kevin Gibbs, who was instrumental in creating Google App Engine and Google Suggest — offering desktop and mobile apps that were said to run at 2.6 times the speed of Microsoft Office.
In fact, Taylor acknowledged late last year that Quip had been approached by a number of companies as an acquisition target.
Salesforce acted on the opportunity yesterday. It announced it was buying the document collaboration company for $582 million plus "consideration attributable to Salesforce Ventures’ existing investment in Quip." Salesforce Ventures is the investment arm of Salesforce.
Although the total price was not disclosed, published reports estimate it around $750 million.
A Premium Price for Quip
It's a hefty price for a company that has raised a mere $45 million to date. In 2013, Quip raised $15 million from Benchmark Capital, with participation from Greylock Partners, Yuri Milner, Ron Conway and Salesforce CEO Marc Benioff. Last October, Quip raised another $30 million in a Series B round led by Greylock Partners with participation from Benchmark.
Quip is a next-generation productivity platform designed for teams, combining communication and content to enable collaboration within documents or spreadsheets, on phones, tablets, wearables and the desktop.
Salesforce likely is less interested in turning a quick buck on the deal than digging into the productivity space. Both Google and Microsoft have been trying to dominate enterprise productivity, but the Salesforce buy of Quip creates the possibility of a three-way race.
Following the acquisition, Quip will be a wholly owned subsidiary of the Salesforce.
A Word from Quip's Founders
Taylor and Gibbs founded Quip in San Francisco in 2012. In a blog post about the sale, they said the acquisition gives them the opportunity to expand their service more quickly and more effectively reach a global market, "which has been our mission since day one.”
Salesforce has had a busy year: It already bought Demandware, expanding its reach into the online retailing space. By adding a productivity platform into the mix, it increases its odds of matching Microsoft slug for slug just about anywhere in the enterprise productivity space.
As a Salesforce subsidiary, Taylor and Gibbs said Quip will benefit from the Salesforce Customer Success Platform. "The possibilities of mixing data, content and communication are amazing," they noted, adding, “Salesforce and Quip share the same philosophy about software: it should be in the cloud, built for the mobile era, and be inherently social.”
Microsoft's Missed Opportunity?
It seems surprising that Microsoft didn't make a bid for Quip, which claims to have 30,000 customers and millions of users globally.
In an interview with CMSWire last year, Quip’s Chief Operating Officer Molly Graham noted that Quip had native advantages over both Microsoft and Google.
“Quip has collaboration and multi-device use at its heart and in its DNA, whereas Office and Google were built for the era of the desktop and the single-user file attachment. We believe the way people work is rapidly changing and that new tools are required to meet that change,” she told us.
So why didn't Microsoft bite? Perhaps because it would have meant buying a bunch of enterprise apps that Microsoft already has and is already marketing furiously through Office 365.
And then there is the matter of Microsoft's other pending acquisition — the $26.2 billion LinkedIn buy. Just this week, Microsoft revealed it plans to tap the debt markets to fund the deal. In plans filed yesterday with the U.S. Securities and Exchange Commission, Microsoft indicated it will finance the transaction primarily through the issuance of new indebtedness, specifically a multipart bond offering.
The acquisition is anticipated to accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics. Microsoft also expects it to result in a significant increase in goodwill and intangible asset balances.