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Zendesk acquires Zopim before IPO

Zendesk acquires Zopim for undisclosed amount – is it part of a larger strategy?

CORRECTION: We apologise for the previous headline which might have led readers to think Zopim is entering IPO. It should have been Zendesk instead.

In its first acquisition before its $150 US million scheduled IPO, Zendesk is acquiring Singapore-based Zopim for an undisclosed amount of money. Zopim’s flagship chat software allows brands to have live conversations with visitors on websites in the form of a widget and is used by some 120,000 websites.

As a result of the acquisition, Zendesk will be phasing out its own chat software and integrating Zopim software into their platform, writes Adrian McDermott, SVP of product development, in a blog post announcing the news. This will no doubt make relationships between Zendesk and their clients more fluid.

As Zopim is a Singaporean company, it was also reported that the entire team is joining Zendesk. This potentially gives the San Francisco-based company Zendesk an expansion point into Asia. Additionally, e27 has sources who revealed that Zopim had once looked at fund raising from Silicon Valley investors.

McDermott claims to have acquired Zopim to accelerate its chat functionality and to bring users a beautifully simple product they can use to engage their customers in real-time. He also stated that “Zopim has a great track record of providing tools for proactive customer experiences to customers worldwide.”

The Singapore company Zopim started in 2008 and came out of beta two years later. By 2012, it hit an annual sales revenue of US$1 million.

Could this acquisition be part of a bigger strategy for Zopim besides gearing up for its IPO? This could be scenario where there is bigger deal in play. For example, in 2010, McAfee, Inc. bought tencube, which came up with the mobile security service called WaveSecure. Eventually, a larger deal took place where Intel reportedly bought McAfee, Inc.

This interesting as Viki, a streaming video platform that crowdsources translated subtitles, was also trying to raise money, but got acquired instead by Rakuten for a reported $200 US million.

Zopim had raised under $500,000 since being founded back in 2008 and was also one of the earlier companies that was funded by iJam. The startup has received support from Media Development Authority (MDA) Singapore, SPRING Singapore and the National University of Singapore.

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