Dive Brief:

• Sydney, Australia-based Atlassian, the company behind workplace project management tools such as Jira and Confluence, said Thursday that it agreed to acquire video messaging platform Loom in a $975 million deal.

• With the planned acquisition, Atlassian is betting on the future of work communication via “asynchronous video” messages — which can be recorded and viewed at any time for convenience — as remote employment becomes increasingly more normal.

• “Async video is the next evolution of team collaboration, and teaming up with Loom helps distributed teams communicate in deeply human ways,” Mike Cannon-Brookes, co-founder and co-CEO of Atlassian, said in a press release.

Dive Insight:

By 2025, 36.2 million Americans will be working remotely, an 87% increase compared with pre-pandemic levels, according to a 2020 study by freelancing platform Upwork.

Nearly all (98%) of current remote workers would like to remain away from the office — at least some of the time — for the rest of their career, according to social analytics firm Buffer's 2023 State of Remote Work report. In addition, 66% of job-seeking remote workers said it was important that their next job is remote. 

In announcing its acquisition deal, Atlassian said the global movement toward distributed work has fueled “a need for new ways to help teams collaborate when they are not in the same location or even the same hemisphere.”

“Asynchronous (async) video has been at the forefront of this movement with Loom’s business users recording almost 5 million videos per month,” the company said in its release.

Atlassian, which serves more than 200,000 customers globally according its website, sees an opportunity for the combined company to “elevate” the work collaboration experience, with engineers being able to visually log issues in Jira and human resources teams having the ability to onboard new employees with personalized welcome videos, for example.

Also, by integrating both companies’ investments in artificial intelligence, customers will be able to “seamlessly transition between video, video transcripts, summaries, documents and the workflows developed from them, providing multiple ways for teams to connect and collaborate,” according to the release.

Earlier this year, Atlassian rolled out a suite of AI improvements to its widely-used workplace information and communication platforms Confluence and Jira Service Management, based on internal work and OpenAI’s GPT-4 large language model, as previously reported by CFO Dive.

The $975 million purchase price for the Loom deal includes $880 million in cash, with the remainder consisting of Atlassian equity awards, subject to continued vesting provisions, according to the release. Atlassian said it expects to fund the transaction through existing cash balances.

The transaction is expected to close in the third quarter of Atlassian’s fiscal year 2024, subject to “customary closing conditions” and required regulatory approval, the release said.