Microsoft's LinkedIn Unit Acquires Heighten For Sales Productivity Software

| About: Microsoft Corporation (MSFT)
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Summary

LinkedIn is acquiring sales software startup Heighten for an undisclosed amount.

Heighten makes software that helps sales professionals track, update and report their sales pipeline more efficiently.

The deal is part of LinkedIn's strategy to extract more value from its social network and connect it to external sales and CRM processes.

Quick Take

Microsoft (NASDAQ:MSFT) subsidiary LinkedIn has agreed to acquire sales productivity software startup Heighten for an undisclosed sum.

Heighten provides software that enables sales professionals to track leads, import and manipulate related data and report the results in an efficient manner.

The deal is part of an ongoing initiative in LinkedIn to slice off value from the sales enablement process and take full advantage of its business social network.

Target Company

The Redwood City, California-based Heighten was founded in 2012 to create software that helps enterprise sales forces operate more efficiently.

Company management was headed by co-founders Scott Olrich and CEO Luke Braud. Olrich was previously president of Responsys within Oracle (NYSE:ORCL) and is now the chief strategy and marketing officer at DocuSign (ESIGN). Braud was previously VP - Products and Engineering at Zuora.

Heighten raised a single round of known funding, a Series A of $7.36 million in September 2015 from undisclosed investors. However, Daniel Springer of Advent International is believed to have been a board member or advisor to Heighten, so Advent may have been an investor in the company.

Acquisition Terms and Rationale

Neither company disclosed the amount or terms of the transaction, and it isn't clear from available information whether the deal has already closed or is still pending.

Although Heighten has been around for a few years, it likely had minimal revenues, and the deal is probably a "team and tech" acquisition for $20 million or less. LinkedIn didn't file an 8-K, so we don't have any details on the deal terms.

Heighten will provide LinkedIn with three core areas of functionality:

Sales process tracking - The sales process tracking feature allows reps and managers to take their sales playbook binder off the shelf and put it into software, making it easier to see actions and content relevant to each pipeline stage.

Hyper-efficient pipeline reporting - The sales pipeline reporting feature lets managers and reps see their current opportunities in a more efficient way, and update key opportunity fields like amount, close date, stage, and next steps on a single screen, with all changes automatically written back to CRM.

Intelligent notepad - Makes it easy for reps to take free-form notes and rapidly move information back into their CRM system with a single click. It also gives them instant access to key deal content such as person and account profiles, collateral, and competitive battle cards.

So, Heighten wants to effectively "unbundle" certain higher-value aspects of sales workflow software functions from services such as Salesforce (NYSE:CRM).

For its part, LinkedIn wants to integrate Heighten's functionality into its Sales Navigator, a service it originally launched in 2014.

However, in March 2017, LinkedIn expanded Sales Navigator to sync with whatever major CRM system the user wanted.

Furthermore, with the acquisition of LinkedIn by Microsoft, it is believed that this type of connectivity will become more important as Microsoft looks to expand LinkedIn's reach into the enterprise.

With the deal for Heighten, LinkedIn is therefore accelerating its functionality by providing intuitive sales tools that can communicate with existing databases, effectively slicing off value from those databases and relegating them to repository status.

Assuming the integration of Heighten goes smoothly, it makes sense for LinkedIn to leverage its base of more than 450 million users and get to market with new capabilities as soon as possible.

I expect to see further announcements and functional acquisitions from LinkedIn as it builds its offerings in the sales enablement space.

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