Enterprise software maker Atlassian is paying $165 million for AgileCraft, a startup that sells software to manage business projects.
The acquisition, announced Monday, is part of Atlassian’s expansion from selling software development tools to more general workplace software. Atlassian is known for products like Jira, a tool for tracking software development tasks, and Bitbucket, which lets developers store and collaborate on the software code itself.
The deal is expected to close in April, Atlassian said.
AgileCraft, based in Georgetown, Tex., specializes in software that lets businesses track individual projects in a similar way to how developers build software in the agile development style of small, quick updates, or iterations. Executives in many industries have been increasingly applying that philosophy more broadly in managing their companies.
Cameron Deatsch, Atlassian’s vice president of product, said that executives from Atlassian and AgileCraft initially met over breakfast to discuss whether they were “enemies” or “friends.” Although Atlassian originally intended to partner with AgileCraft, Atlassian executives ultimately decided to buy it because they shared many of the same customers and AgileCraft’s product was already integrated with Atlassian’s, underscoring a growing trend in enterprise software.
Some of Atlassian and AgileCraft’s joint customers include AT&T, Fidelity, and Anthem, said AgileCraft CEO Steve Elliott.
The executives said there are no plans to eliminate any integration between AgileCraft’s service or any integration with rivals to Atlassian’s.
Deatsch said that Atlassian could have built something similar to AgileCraft’s business management tools, but that it would have taken a longer time than simply buying the company.
In the past, companies have typically used a combination of spreadsheets, emails, and other digital documents to manage their business projects. Increasingly, however, they are using project management software intended to consolidate information into a central repository, which makes it easier for companies to monitor progress on individual tasks and initiatives.
Many big businesses like Microsoft and Salesforce are increasingly competing with Atlassian as they also expand their product portfolios. Last year, Microsoft, for example, spent $7.5 billion on the Bitbucket competitor GitHub to help the Office-maker court more developers. Salesforce, on the other hand, is expanding its core software for sales teams to include more document, presentation, and spreadsheet tools so that workers can track their projects within Salesforce.
“We got to focus on moving faster and building products,” Deatsch said about competing with larger companies.
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Since Atlassian went public in 2015, its shares have skyrocketed 260% to around $110. Although Atlassian’s revenue continues to grow, Atlassian is unprofitable like many other technology companies including Dropbox and DocuSign that have gone public in recent years.
Some of Atlassian’s other big acquisitions include paying $425 million for project management startup Trello in 2017 and $295 million for IT software company Opsgenie in 2018. Atlassian also sold its HipChat and Stride workplace chatting software to Slack for an undisclosed amount in 2018.
AgileCraft, founded in 2013, raised $10 million in 2015 from private equity firm Crane Nelson and has 57 employees.