Bengaluru, NFAPost: Facebook is again on an acquisition spree and this time has decided to buy customer service chatbot startup Kustomer for total money of $1 billion.
According to Arvian Research, the financial terms of the deal are not disclosed the New York-headquartered startup will have a total valuation of more than $1 billion. This is given credence with the fact that a recent private funding round last year Kustomer was valued at $710 million.
“Besides giving customer service teams better data and a more unified view of the people they’re interacting with, the acquisition will help Facebook improve its offerings for businesses that have a presence (in some cases, their primary digital presence) on the social network,” said Arvian Research.
An omnichannel software-as-a-service (SaaS) and customer relationship management (CRM) startup that specialises in chatbot technology, Kustomer was founded in 2015. Its chief executive officer is Brad Birnbaum and chief technology officer is Jeremy Suriel.
Facebook said in the release that it’s acquiring the startup to “continue to support the numerous options that businesses have to integrate their CRM platform of choice with our messaging services,” and to help Kustomer scale its business and product offerings.
“We want businesses of all sizes and across all industries to discover the value of messaging — and having a vibrant partner ecosystem is critical in providing our customers with choices,” Facebook said in the press release, noting that over 175 million people use WhatsApp to contact businesses every day.
Shopify teamed up with Kustomer in July to advance more efficient operations. Kustomer said its platform will help retailers on Shopify automate 40% of interactions. The collaboration will also enable businesses to track all customer interactions.
Earlier this month, Joe Simons, chairman of the Federal Trade Commission, said when big companies acquire startups, that is a red flag signaling possible anti-competitive practices.
Some fear that innovation could suffer if regulators come down on mergers and acquisitions. Simons said there could be blockades to end some usual routes to growth.
“A monopolist can squash a nascent competitor by buying it, not just by targeting it with anti-competitive actions,” Simons said earlier this month.
In a PYMNTS interview, Jim McCarthy, president of i2c, said global regulatory forces are largely over-reacting when it comes to competition law and Big Tech and the results could have consequences. He said the intersection of data, privacy, and consumer protection make the issue difficult, and the solutions offered haven’t had consumers’ interests in mind.
The Pandemic Anti-Monopoly Act was introduced earlier this year by Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez and calls for an M&A moratorium involving companies with more than $100 million in revenue or financial institutions (FIs) with more than $100 million in market capitalization.
The Menlo Park-based social media giant has been expanding its e-commerce offerings this year. In August, it added various shop features to its apps. Last month, Facebook Chief Operating Officer Sheryl Sandberg said that 40 million people view a business catalog each month on WhatsApp.
Sandberg said that the company would enable “click a WhatsApp icon on a Facebook Shop to chat directly with the business.”