Absorb to acquire Together in bid to bring mentorship to its learning software

Calgary-based learning technology company Absorb Software has reached a deal to buy Canadian mentorship platform Together Software.

The two companies plan to integrate Together’s mentorship software into Absorb’s broader learning management system (LMS) and product ecosystem.

Together co-founder and CEO Matthew Reeves told BetaKit that the two tech companies decided to join forces because there is a “natural fit” between their products.

“Together stood out for its leadership in mentorship and coaching—key components of effective employee development.”

The transaction is expected to close later this month, after which Together will become a wholly-owned subsidiary of Absorb. Both companies declined to disclose the acquisition price to BetaKit. Reeves claimed that the primarily cash deal was “priced on a healthy revenue multiple.”

As part of the acquisition, Reeves said that all 35 of Together’s employees are staying on and Absorb plans to invest in Together to expand its team.

In a Dec. 10 blog post announcing the deal, Absorb noted that mentorship plays an important role in employee onboarding, engagement, and upskilling, but said that peer-to-peer learning has become more difficult amid the rise of remote and hybrid work during the pandemic. Absorb also claimed that historically, mentoring platforms like Together “have been siloed” from LMS offerings like its own. With this deal, Absorb hopes to bring the two closer together.

“By offering a best-in-class mentoring and coaching platform alongside our leading LMS, we address a critical gap created by remote and hybrid work,” an Absorb spokesperson told BetaKit.

Founded in 2003, Absorb sells LMS software to businesses, governments, healthcare providers, educators, and non-profit organizations that helps organizations train, retain, and manage both employees and external stakeholders virtually.

In 2021, Absorb was acquired by New York-based private equity firm Welsh, Carson, Anderson & Stowe (WCAS) in a deal that valued Absorb at over $500 million USD. WCAS bought the Alberta-based tech business from Boston growth equity firm Silversmith Capital Partners, which led the company’s $59-million financing in 2017.

At that time, Absorb catered to over 23 million users at more than 1,400 organizations across 34 countries and had reached $50 million in annual recurring revenue following record growth amid the shift to working from home during the early days of COVID-19.

The Absorb spokesperson declined to share the firm’s current revenue but claimed that Absorb has sustained strong growth since 2021 and is growing at a rate of 20 percent. Today, Absorb has 587 employees and has grown to serve over 34 million users and more than 3,000 customers. Absorb’s clients include businesses like Atlassian, A&W, Gap, Geotab, Johnson & Johnson, Samsung, Sony, Symend, and Toyota.

Together, which was launched in 2018 by Reeves and head of product Nathan Goldstein, is incorporated in Canada and the United States (US) with an office in Toronto, and employees across both countries. The company, which focuses primarily on the US market, has developed a corporate mentorship management platform designed to boost employee advancement, retention, and productivity. Together’s offering manages the mentorship process from registration to reporting, helping clients adhere to best practices. It serves customers like AstraZeneca, Coca-Cola, Heineken, Kellogg’s, Lightspeed Commerce, and 7-Eleven.

Prior to this deal, Together had raised $6.5 million in total funding from a list of backers that includes AltaIR Capital, TRAC, Kitchener-Waterloo’s Garage Capital, Rebel Fund, and Funders Club, among others, a figure that includes $5 million in financing from early 2022.

According to Reeves, today, Together is generating millions in annual recurring revenue, growing quickly, and cash-flow neutral. The CEO said that Together was also considering raising a Series B round before striking this agreement.

Reeves claimed that the startup ran a competitive process before deciding to sell to Absorb. “Together’s financial profile (growth [and] efficiency) made Together an attractive target even in this environment,” he said.

Absorb’s acquisition strategy involves identifying high-growth, profitable companies that operate in areas complementary to the company’s core offerings. Together, which helps organizations build scalable mentorships and employee connection programs through its platform, marks Absorb’s fifth acquisition to date.

“Together stood out for its leadership in mentorship and coaching—key components of effective employee development,” the Absorb spokesperson said. They added that Absorb’s primary objective through this deal is to provide “a comprehensive learning solution that addresses all enterprise learning needs” by fully integrating the two platforms over time.

For now, the experience will remain the same for existing Absorb and Together customers, and Together will continue to operate as a standalone solution as the two companies explore ways to expand and connect their platforms.

Feature image courtesy Together.