Home / Business / Adobe to acquire Magento for $1.68B

Adobe to acquire Magento for $1.68B

Adobe announced today that it was acquiring Magento for $1.68 billion. The purchase gives Adobe a missing e-commerce platform piece that works in B2B and B2C contexts and should fit nicely in the company’s Experience Cloud.

It should also help Adobe compete with Salesforce, which offers its own marketing, sales and service offerings in the cloud and which bought Demandware for more than $2 billion in 2016 to provide a similar set of functionality.

Brent Leary, who owns CRM Essentials and keeps a close eye on the intersection between marketing and CRM, says this fills an obvious hole in Adobe’s Experience Cloud. “Now they have an offering that allows them to close the loop with consumers, who are able to finalize a digital transaction that started online with digital marketing tools Adobe already offered,” Leary explained.

Leary also sees this deal bringing Microsoft and Adobe, who have already announced partnerships in the past, closer together. “But maybe even more interesting may be how this may further the relationship Adobe has with Microsoft. As they also are missing an e-commerce piece to their customer engagement platform [as well],” he pointed out. Leary speculates this could lead to an even deeper relationship between the two companies as they are each battling Salesforce.

Salesforce is the 10,000-pound gorilla in this space with revenue across its various clouds reaching more than $8 billion last year. The company is on a run rate to exceed $10 billion in 2018. It has set a long-term company goal to reach $60 billion in annual revenue by 2034.

Leary says this isn’t necessarily the perfect deal because up until now Magento has concentrated on SMB customers, whereas Adobe’s target audience is clearly the enterprise. If you look at the other players in the space who have already taken the e-commerce platform plunge, Salesforce got Demandware and SAP got Hybris, which were geared more to the enterprise target demographic, but he believes it was simply a case of the best option available.

This isn’t the first time the company has been acquired. Magento was founded in 2008 and purchased by eBay in 2011 in a deal reported to be just $180 million. The company went private again in 2013 with help from Primera Funds. Today the company sold for almost $1.7 billion. That’s a hefty increase in value since that 2011 purchase.

Its most recent funding round came last year from private equity firm Hillhouse Capital Group in the amount of $250 million, according to data on Crunchbase. It would appear it got a nice return on its investment in just one year.

Check Also

Drip Capital helps exporters access working capital

Drip Capital is raising a $20 million funding round from Accel, Wing VC and Sequoia India. The company is helping small exporters in emerging markets access working capital in order to finance big orders. The startup also participated in Y Combinator back in 2015. Many small companies in emerging markets have to turn down orders because they can’t finance big orders. Even if you found a client in the U.S. or Europe, chances are companies will end up paying for your order a month or two after signing a contract. If you’re an importer or an exporter, capital is arguably your most valuable resource. You know where to source your products and how to ship many goods. But you still need to buy goods yourself. And in many emerging markets, you have to pay right away. It creates a sort of capital gap. At the same time, local banks are often too slow and reject too many credit applications. Drip Capital thinks there’s an opportunity for a tech platform that finances exporters in no time. The startup is first focusing on India because it meets many of the criteria I listed. This could be particularly useful for small and medium businesses. Large companies don’t necessarily face the same issues as they can access capital more easily. So far, Drip Capital has funded more than $100 million of trade. After signing up to the platform, you can submit invoices and open a credit line to finance your next orders. Family offices and institutional investors can also invest some money in Drip Capital’s fund and get returns on investment. This isn’t the only platform that helps you get paid faster. But larger companies tend to do it all and optimize the supply chain for the biggest companies in the world. Drip Capital is focusing on a specific vertical. With today’s funding round, the company plans to get more customers and expand to other countries.

Leave a Reply

Your email address will not be published. Required fields are marked *

Disclaimer: Trading in bitcoins or other digital currencies carries a high level of risk and can result in the total loss of the invested capital. theonlinetech.org does not provide investment advice, but only reflects its own opinion. Please ensure that if you trade or invest in bitcoins or other digital currencies (for example, investing in cloud mining services) you fully understand the risks involved! Please also note that some external links are affiliate links.