Facebook To Acquire Customer Service Chat Startup Kustomer

Topline

 Facebook on Monday said it will acquire customer service startup Kustomer for an undisclosed sum, a deal that allows the social media giant to build out its tools for businesses, which already depend on the platform for advertising.

Key Facts

The terms of the acquisition, which still has to be approved by regulators, weren’t disclosed, but the Wall Street Journal reported the deal values Kustomer at a little more than $1 billion.

Kustomer pulls interactions from a single customer on different platforms, such as text or email, into a single screen.

Facebook said it decided to make the acquisition after it noticed an increase in customers using WhatsApp and other text services to contact businesses, and plans to provide resources for Kustomer “to scale its business, improve and innovate its product offering and delight its customers.”

Kustomer was founded in 2015 and has raised $173.5 million from Tiger Global Management, Coatue, Battery Ventures, Redpoint, Canaan Partners, Social Leverage and Cisco Investments, according to Crunchbase.

Facebook said it will continue to support other customer relationship management programs that integrate into its messaging services.

Surprising Fact

Kustomer is already used by big clients like Rent the Runway, Glossier, Ring and Untuckit.

Key Background

 The deal is part of Facebook’s effort to become a hub for small businesses to interact with customers and sell things through Facebook and Instagram. The tech giant already announced Facebook Shops in May, which allows businesses to create online storefronts on Facebook and Instagram. And Instagram’s latest update, the most significant redesign of the platform in years, put a Shop tab on the homescreen. Appealing to businesses is already lucrative for Facebook, which is expected to make $31.4 billion in advertising sales alone in 2020.

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