IDT Subsidiary Net2phone Acquires LiveNinja

| About: IDT Corporation (IDT)
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Summary

Net2phone has acquired live chat technology company LiveNinja for an undisclosed sum.

The acquisition will help net2phone build out its PicuP unified communications system for SMBs.

Look for more initiatives from net2phone as it continues to build services around its growing 'communications network' of SMBs.

Quick Take

Net2phone, a subsidiary of IDT Corporation (NYSE:IDT), has acquired messaging technology company LiveNinja for an undisclosed amount.

The acquisition will provide net2phone with additional live chat capabilities for its PicuP communications service for SMBs.

This acquisition is probably the beginning of a continuous build-out of net2phone's offerings to its burgeoning communications network of SMB customers.

Target Company

Miami-based LiveNinja was founded in 2011 by CEO Will Weinraub, CTO Emilio Cueto and Alfonso Martinez.

Originally focused on a video-chat application, the company pivoted in 2016 to develop online communication tools such as messaging and live chat for businesses to more effectively interact with customers and prospects.

The service works on all browsers, major smartphone platforms, Facebook Messenger, WordPress sites, and SMS.

LiveNinja raised approximately $3 million in four separate financings from investors such as Comcast Ventures, Citi Ventures, Scout Ventures, individuals and other entities.

Acquisition Terms and Rationale

Acquisition terms of the transaction were not disclosed by the parties, nor were there "whisper" amounts reported in the tech press.

As net2phone's President Jonah Fink referred to the acquisition, "The acquisition of LiveNinja reflects our commitment to grow PicuP into a market leading multi-channel communications platform for small to mid-sized enterprises."

So, the technology will be integrated into net2phone's PicuP offering, which is a cloud-based communication service suite for SMBs.

PicuP is an automated service that enables SMBs to configure communication options across a range of channels depending on how the business prefers to respond to customer or prospect inquiries.

Commentary

Net2phone likely acquired LiveNinja on the basis of 'build or buy' valuation, since LiveNinja offered its applications for free to users in order to drive adoption.

My guess is that net2phone paid in the range of $5 to $7 million for the acquisition, which stands to quickly fill out the PicuP offering with its messaging and live chat capabilities.

The overall goal for net2phone's PicuP service is to provide SMBs with a unified communications tool, so this type of acquisition can speed time to market with that goal in mind.

Net2phone's parent company, IDT, also plays in the payments space, so combining communications with payments for SMBs is a compelling opportunity, as the two functionalities continue to merge.

I suspect net2phone's ultimate strategy may be to develop a 'communications network' of SMBs that it can cross-sell an increasing number of services to.

Payments would be the next logical step after providing a full-featured communications service.

Look for more announcements along these lines in the future for net2phone.

The LiveNinja acquisition is just one of its early steps as it continues its focus on the SMB market.

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