2020 was one of the most traumatic years that many of us will ever have to face. For much of the population, it will be remembered as a year the world stood still.
Yet, for big business, many things carried on as normal. Indeed, many even prospered. Niche companies suddenly became cash cows while big tech and other multinationals began snapping up new acquisitions.
Below are some of the major acquisitions of 2020.
1 Salesforce and Slack
In December 2020 Salesforce completed their acquisition of Slack for a whopping $27.7 billion in cash and stocks. It does not seem that long ago that Slack was suffering. A public launch in 2019 had not gone as well as planned, and the marketplace they were operating in had become saturated. Despite a large and growing customer base, the company was struggling to make money and increasing competition from the likes of Zoom, Microsoft Teams and a host of other startups was taking its toll. Despite revenues of close to $850 million, the company was not making money and the market was not persuaded. At one point their stock was down by 40%.
And all this was occurring in a market where working from home had become the new norm and their product was one of the great facilitators of this shift. There is no doubt that with a turnover of such amount there is a profit to be made and Salesforce have obviously recognized this.
2 Just Eat swallows GrubHub.
Two of the big players in the burgeoning take way food order and delivery sector have become one, with Just Eats’ purchase of its American counterpart GrubHub. GrubHub had itself been quite greedy on the acquisition front and had grown to become the American market leader in its niche. Just Eat are the European market leaders in the same niche.
Since the acquisition, they have become the world’s largest food delivery outside of China. Uber were already considering a takeover of GrubHub when Just Eat stepped in and completed an all-stock deal worth $7.3 billion dollars.
With many people locked down the world over and take away food replacing a night out in a restaurant, this is going to be a sector that continues to grow. Recent trends due to the pandemic have largely fueled this growth and, while this may signify a slight turn down in fortunes as the world recovers, a stronger customer base and learned habits have cemented their niche.
3 Uber and Postmates
Not to be outdone by Just Eats’ acquisition of GrubHub, and in recognition of what is a rapidly expanding sector, Uber completed the acquisition of another large food delivery service, Postmates. The deal, worth $2.65 billion, was instigated in July 2020 and Uber announced its completion in December 2020.
There is definitely a synergy between the two niches that Uber obviously feel they can take advantage of. With their unfruitful approaches to GrubHub, it is an area they have been keen to expand into.
4 Facebook buys Kustomer.
Only started in 2015, Kustomer has built a reputation as one of the top Customer Relation Management platforms. For Facebook to pay $1 billion dollars for such a recent startup speaks volumes about how the platform progressed and how seriously they are about integrating a CRM system into its existing platforms.
With a huge amount of business now taking place through Facebook platforms such as Facebook itself, Instagram, WhatsApp and even Messenger, Facebook have been keen to build more CRM into their existing platforms. This merger is seen as their first serious foray into a more integrated and seamless CRM system being built into their existing systems.
5 Morgan Stanley and E-Trade
Morgan Stanley is a ‘traditional Wall Street Investment Bank’ that have now made the move into the burgeoning ‘digital traders’ market.’ In many ways this should not be a surprise, with the purchasing power of millions of ‘low-flyer’ online investments beginning to match their traditional ‘high-flyer – high investment’ market, it is merely cementing their market position as a leading Investment House.
E-trade have 5.2 million customers that will now benefit from the Blue-Chip expertise that Morgan Stanley has in abundance. With a $13 billion price tag, this has been described as the biggest bank takeover since the financial crisis of 2008.
6 Zoom Buys Keybase
Without a doubt, Zoom’s business flourished during the pandemic. From being a niche bit of software that few people had heard of, it became the go-to tool for those locked down and working from home and for those keeping in touch with family and friends they were no longer able to visit.
However, throughout the year they were dogged by concerns regarding the security of their platform. The acquisition of Keybase for an undisclosed sum was seen as the major step that Zoom had taken in its ’90-day plan’ to bolster its security systems.
This is the first acquisition in Zoom’s nine-year history and what it shows is their commitment to becoming one of the biggest and most secure video-conferencing suites. With Keybase integrated into their systems, full end-to-end encryption is now a feature of Zoom.
Intuit and Credit Karma
Finally, the accounts giant Intuit, maker of software packages like Quick Books, TurboTax and Mint announced in February that it had agreed terms to purchase the credit history firm Credit Karma for $7.1 billion.
This signifies a step toward the general consumer market for Intuit, who hope to be able to offer a personalized financial assistant service to help people take control of their finances and have tailored financial solutions at their fingertips.
2020 was a remarkable year for acquisitions despite the global pandemic. The few that we touched upon are just the tip of the iceberg. With all this taking place in a world where much business has remained stagnant, it bodes well for a brighter future when the pandemic begins to ease.