The concept of a growing company short on talent acquiring another company simply to fill those open spots is not a new concept. Yahoo acquired 10 small companies prior to Tumblr and within days of the acquisitions, shuttered them and rolled the employees into different divisions of Yahoo. It wasn’t sneaky or malicious. The reported purchase prices ranged from a few million up to $30 million and most of them had less than 20 employees. The founders, VCs and owners received a good payday and the employees joined the Yahoo team doing what they were ‘acqui-hired’ to do.
The concept of a growing company short on talent acquiring another company simply to fill those open spots is not a new concept. Yahoo acquired 10 small companies prior to Tumblr and within days of the acquisitions, shuttered them and rolled the employees into different divisions of Yahoo. It wasn’t sneaky or malicious. The reported purchase prices ranged from a few million up to $30 million and most of them had less than 20 employees. The founders, VCs and owners received a good payday and the employees joined the Yahoo team doing what they were ‘acqui-hired’ to do.
Acqui-Hiring hit Big Data again this past Thursday with BloomReach acquiring the 2 person startup ShopLogic for an undisclosed amount. ShopLogic was working off of “hundreds of thousands of dollars” from both AngelPad and Data Collective to help their online retail clients boost their profit ROI by as high as 638%. Founders Kevin Chan and Dennis Maskevich crunched Big Data down to the individual online shopper displaying a real-time customized landing page based on social data of the visitor. Social media data, purchasing habits, search queries, product views, new visitor, repeat visitor and other criteria went into developing a real-time landing page for each unique visitor.
BloomReach has $25 million in funding so they are just getting started in the M&A game. BloomReach CEO Raj De Datta said “The deal was driven by the quality of the team. Kevin and Dennis have expertise in search, machine learning, and how to get the best users regardless of channel.” Datta continued that the “acqui-hire strategy is one we plan to use for bringing in teams that have worked together and proven they get results.”
VCs are following the money into Big Data with the recent success of Tableau Software’s IPO that’s up over 60% in the first 2 weeks of trading. Google Ventures just backed the big data discovery app Weotta that crawls the web and your social data “aggregating words” to propose cool things for you to do in your local scene. It continues to track your ever evolving social habits and which of their suggestions you take advantage of so they can fine tune future results. Weotta was started 9 months ago and is available throughout the US.
History has proven that this strategy works or companies wouldn’t be continuing to use this tactic to hire talented people. The ROI of bringing in Data Scientists, Software Developers and Big Data Analytics experts through acqui-hires really just comes down to the numbers and with over 138,000 Big Data Jobs posted online, companies are getting aggressive in acquiring Big Data talent.