Samuel Wilson 
Atlassian Acquires Loom for $975 Million, Seeing Potential in Video Messaging
Atlassian, a prominent software company, has announced its acquisition of Loom, a video messaging service, for $975 million. This comes after Loom had achieved a valuation of $1.53 billion in May 2021 when it secured a $130 million Series C funding round. During that time, the vision of a cloud-based work environment seemed promising and filled with potential.
However, the landscape has evolved, and Loom’s valuation has adjusted accordingly. Nonetheless, Atlassian recognizes the value in Loom, with its 25 million customers and over 5 million monthly video conversations. Atlassian believes that Loom can serve as a valuable collaboration tool, especially in conjunction with its platforms like Jira and Confluence.
Mike Cannon-Brookes, co-founder and co-CEO of Atlassian, stated, “Async video is the next evolution of team collaboration, and teaming up with Loom helps distributed teams communicate in deeply human ways.”
Atlassian envisions the power of AI enhancing this acquisition, enabling features such as “video transcripts, summaries, documents, and the workflows developed from them, providing multiple ways for teams to connect and collaborate.”
Joe Thomas, co-founder and CEO of Loom, expressed optimism about the acquisition, emphasizing Loom’s mission to empower effective communication at work. He believes that joining forces with Atlassian will accelerate this mission and unlock the potential of every team.
However, Loom’s journey has been marked by significant fundraising, including a $30 million Series B in 2019 that involved notable figures from the tech industry. Despite boasting a customer base that includes major companies like Ford, Tesla, Disney, Walmart, Goldman Sachs, and Amazon, the company seemed to face challenges in monetizing its services, possibly due to an emphasis on a free-tier model. Last June, the company announced a workforce reduction of 14%.
Atlassian intends to finance the acquisition using its available cash, with the transaction expected to close in the third quarter of the next year, subject to the usual conditions and regulatory approvals.
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