September SMB Software News Recap

Each month we report on news and updates for the companies in the SurePath SMB Index — a basket of publicly traded software and technology companies that serve the SMB market.

Acquisitions and Divestitures

Constituents of the SurePath SMB Index had one of the most active months of 2018 in terms of M&A activity in September. Details follow:

• Zendesk Acquires FutureSimple (Base CRM) in a move to expand outside of support and into sales — The acquisition comes after integrations with Base were added to the Zendesk product suite in 2016. The company seeks to grow the joint offering within the SMB economy while developing enterprise focused offerings in the longer-term. Terms of the deal were not disclosed.
• Atlassian acquires OpsGenie for $295M and launches Jira Ops to help IT teams manage service disruptions — The acquisition of OpsGenie was jointly announced with the launch of Jira Ops, an end-to-end incident management platform integrated with OpsGenie’s alerting and on-call management technology, echoing Atlassian’s strategic focus on the IT department in the development and collaboration space. The joint offering is designed to manage on-call schedules and escalations technology quickly routes alerts to the appropriate IT teams, speeding diagnosis and resolution, and reducing downtime. The $295 deal includes $259 million in cash, with the remaining $36 million coming in the form of stock earn-outs.
• Appfolio acquires utility analytics company WegoWise to serve as a building block for a future utility management Value+ service — WegoWise’s cloud-based solutions serve over 450 customers managing ~700k units in the U.S. with a large presence in multi-family which aligns with Appfolio’s existing customer demographic. The acquisition is a response to utilities management being highlighted a top priority by large portfolio property managers and is it anticipated that this new Value+ suite offering will meet market demands. Terms of the deal were not disclosed.
• Grubhub acquires campus food ordering Tapingo for $150M to expand restaurant network to college campuses across the U.S. — Tapingo boasts a platform designed specifically for campus use, with integrations for college meal plans and POS systems, and a plethora of existing partnerships including many international restaurant brands, food services and facilities management providers. Grubhub paid $150M for the acquisition although other details of the deal were not disclosed.
• Grubhub acquires assets of 11 franchisee-owned OrderUp food delivery markets, a subsidiary of Groupon — Grubhub previously completed a similar deal in 2017 with OrderUp when it acquired assets of 27 of the Company’s delivery markets. Assets acquired this time around are related to delivery markets in California, Colorado, Indiana, Missouri, Oregon, Oklahoma, and Virginia, further expanding Grubhub’s U.S. footprint. The acquisition is expected to close in Q4 2018.
• Cimpress acquires internet-based provider of canvas-print and signage company BuildASign for $280M— The acquisition allows Cimpress’ Vistaprint to leverage BuildASign’s low-cost canvas print fulfillment operations within their own home décor segment, currently outsourced to third-parties, and add depth to their signage business due to their similar product lines. BuildASign will operate autonomously but will leverage procurement synergies and mass customization capabilities made possible by Cimpress to accelerate existing growth in home décor and reinforce their market position with business signage.

New Product Launches and Partnerships

There were several new product launches and partnerships announced by constituents of the SurePath SMB Index in September. Highlights include:

• Shopify rolls out new “Locations” feature to help retailers track inventory across multiple locations — Locations is designed to make tracking products and fulfilling orders easier for merchants through functionalities such as reserving inventory for online orders, visible inventory counts for shoppers, flexible location-based order fulfillment and back-office inventory management all integrated into the Shopify platform. In addition, Location integrates inventory features with applications such as Zapiet, Stocky, Rewardify and Ultimate Special Offers.
• Square announces Solutions Partner Program allowing sellers access to Square certified partners to develop custom solutions— The Program is available to merchants of all sizes and grants access to agencies, resellers and systems integrators who have been pre-approved by Square through an application process. Companies that join the Program are eligible to receive early access to beta products, specialized account management, and additional financial benefits. Partners will also be able to offer their clients all the great benefits that come with using Square, including a commerce experience with PCI compliance, dispute management and transparent rates.
• HubSpot launches new Sales Hub and Service Hub Enterprise offerings, Marketing Hub Enterprise updates and bundled offerings — The newly launched Sales Hub is designed for advanced sales teams as a complete sales toolkit, with features such as various application integrations, prospecting and dashboards all powered by artificial intelligence, advanced automation and custom reporting built on top of the HubSpot CRM. The Service Hub is a full customer service software package to help connect with customers and automate support processes. A full breakdown of the new features for these new offerings can be found on the HubSpot pricing page. HubSpot CRM, Sales Hub, Service Hub and Marketing Hub are being bundled as the “Growth Suite” at a discounted rate.
• HubSpot releases HubSpot Video, an all-in-one video functionality allowing platform users to create, host and analyze video content — HubSpot video is a response to market shifts towards interactive video content in an effort to enable sales, marketing and support teams, to create quick, one-to-one videos that have the same personal qualities available on social media platforms. HubSpot Video is powered in part by Vidyard, a HubSpot Connect partner since 2016 and is a part of the new Sales and Service Hub product launches.
• AppFolio announces AppFolio Property Manager Plus, a new tier of their flagship Property Manager platform— Property Manager Plus includes an expanded suite of capabilities relative to the original platform including a performance insights dashboard, configurable workflow capabilities, revenue management & optimization functionalities and more data access through API.

Other SMB Index News

In other news:

• Xero announces $300M USD convertible notes offering — CEO Steve Vamos outlined that the additional financing will be used to support the “significant opportunities” that Xero has to enhance and extend their SMB platform through the pursuit of complementary acquisitions. The notes offering is for guaranteed senior unsecured convertible notes due 2023.
• HubSpot announces that HubSpot Connect platform partner ecosystem exceeds 200 unique partnership integrations—Over the past year, HubSpot Connect has seen 108% growth in the number of total Connect partners.
• HubSpot announces Paris office, slated to open in Q1 2019 —HubSpot has selected Paris, France as the location of its next global office, signifying the company’s continued investment in the French market. The company has also committed to creating approximately 30 new jobs over the next two years to help meet the demand for HubSpot’s software solutions in France.

Activity in the SMB space outside of our SMB Index

Private and VC/PE backed companies need attention as well:

• Adobe acquires marketing automation firm Marketo for $4.75B
• SurveyMonkey S-1 from their recent $207M IPO
• Freelance marketplace Upwork files to go public on Nasdaq as UPWK
• Slack actively preparing for early 2019 IPO
• Location marketing platform Uberall raises $25M and acquires competitor Navads
• Kira Systems raises $50M in first outside funding round
• WeWork acquires Teem for $100M as the company’s third acquisition
• StackCommerce acquires Joyus
• Mynewsdesk acquires web monitoring service Mention
• Payment startup Stripe is now a $20B company
• Stripe launches new service for in-person payments
• UK-based Funding Circle files for IPO
• SaaS marketing solution provider Tapclicks raises $10M
• Encrypted cloud storage and collaboration company Tresorit secures ‎€11.5M in Series B round
• E-commerce fulfillment and inventory management solution ShipBob raises $40M
• Retail focused cloud-based A/B testing software MarketDial raises $7.5M
• Online order management company Ordermark Raises $9.5M
• Apax Partners to invest in Human Capital Management company Paycor
• Indonesian fintech startup Moka raises $24M led by Sequoia India
• Prolific Business Solutions acquired By Talus
• Employee analytics service provider Emplify raises $7.5M
• Leading MENA healthcare startup Vezeeta secures $12M Series C
• Dental practice management firm CareStack raises $16M
• Cannabis POS software company Treez raises $11.5M
• French SMB banking startup Qonto raises $23M
• E-commerce fraud detection software Forter raises $50M Series D
• ThriveHive launches solution to audit Google My Business profiles
• Evernote loses CTO, CFO, CPO and Head of HR as the company seeks another fundraising round
• Vimeo pivots business from media to tech
• Instagram to build a standalone app for shopping