Zendesk acquires Montreal’s Smooch

San Francisco’s customer service platform giant Zendesk has acquired Montreal startup Smooch.

Zendesk announced the acquisition on its blog Wednesday morning. The purchase price was not disclosed.

Smooch is a messaging platform that brings together context, formatting, and other data from various messaging channels. Zendesk has been a long-time partner of Smooch and already uses it to bring messaging to its customers, meaning they can keep the conversation going even when a customer’s conversation spans different channels.

Smooch was founded while CTO Mike Gozzo was still at his previous company Radialpoint. Radialpoint was later acquired by AppDirect in November 2015. The company then raised $10 million in funding in August 2016.

Within that same period, noted Betakit’s Isabelle Kirkwood, 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.

Smooch Chairman Hamnett Hill told the website 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 told Kirkwood. “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 platform standardizes communication across social messaging channels and across its own web and mobile SDKs — meaning businesses can follow a conversation thread from any messaging channel while providing their customers with a consistent messaging experience.

The acquisition marks Zendesk’s fifth, following Outbound.io, Zopim, Bime Analytics, and Base.

CEO Mikkel Svane said that Smooch’s technology will help drive “the next wave” of connected conversations on a range of messaging channels. A new Zendesk solutions team will support customers who plan to use Smooch’s products to build bespoke conversational apps and web pages.

“We live in a messaging-centric world, and customers expect the convenience and interactivity of messaging to be part of their experiences,” said Svane. “As long-time partners with Smooch, we know first-hand how much they have advanced the conversational experience to bring together all forms of messaging and create a continuous conversation between customers and businesses.”

Zendesk is a publicly-traded company that took on $85 million in venture capital before going public on the New York Stock Exchange.


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