Montreal-based Smooch, allowing companies to manage customer conversations across multiple social messaging and communication platforms, has been acquired by San Francisco customer service and engagement platform, Zendesk. The terms of the acquisition are not being disclosed.
“What defines Smooch is connecting all of the world’s messaging channels to the enterprise software that businesses use to connect with their customers.”
Smooch will continue to work out of its Montreal headquarters and has plans to grow the team. Smooch chairman Hamnett Hill said the company is excited to leverage Zendesk’s 145,000-strong customer base.
“Through this acquisition, we’re going to have not only more resources to accomplish the building of the core platform, but a lot of other really exciting components as part of the… broader ecosystem,” Hill told BetaKit.
Smooch was founded while chief technology officer Mike Gozzo was still at his previous company Radialpoint. Radialpoint was later acquired by AppDirect in November 2015, giving Smooch new life as a startup. When the co-founders set out to create Smooch, they wanted to make it easier for users to access customer support using a business’s website, in an app, by text, or through various instant messaging platforms like Whatsapp or Facebook Messenger.
In early August 2016 Smooch announced $10 million CAD in Seed funding. The round was co-led by iNovia Capital and Real Ventures with participation from TA Associates and the startup’s founders. In the 2016 to 2017 period, when Smooch first began commercializing, the company started doing business with companies like Zendesk, Oracle, Four Seasons, and Uber.
Within that same period, Smooch added companies like Slack and FrontApp as users of its Smooch Conversation CloudS, which lets companies use their existing business software and processes to have conversations with their customers through messaging apps and SMS, websites, and mobile apps.
Hill stated that it was the announcement of Zendesk’s product, Sunshine, which allows businesses to connect and understand customer data, that fuelled the deal between the two companies.
“Without that product announcement, there was no way to do a deal,” Hill said. “They couldn’t have valued us properly, there wouldn’t be a strategic alliance between the businesses, because we would only be a plugin to their own product, and that wouldn’t justify acquiring us. That’s where this really fits in nicely, because they are embracing an open CRM platform strategy, which is exactly what Smooch has built.”
Smooch’s headless (software capable of working on a device without a graphical user interface) API and SDK-based platform, and its ecosystem of over 100 integrated CX platforms, has more than 4,000 businesses using the platform to improve the business-consumer relationship. Gozzo said that in the last three or four months, Smooch has doubled its employee headcount to 60 and plans to double that number again by the end of the year.
“Not a lot has changed since 2017 when we locked in our go-to-market strategy,” Hill stated. “What defines Smooch as a platform is connecting all of the world’s messaging channels to all the enterprise software that businesses use to connect with their customers.”
“Too many people need access to the data. I think the announcement we’ve seen from Zendesk in terms of Sunshine and learning much more deeply… about their roadmap and their vision, [Zendesk is] so aligned with our vision and is so aligned with what we believe in and where we think the market is going to go,” said Gozzo. “That’s what made this combination so natural for us.”
Image courtesy Smooch