The mysterious buyer of online calendar Kiko has stepped out of the shadows, revealing himself to be Elliot Noss, the CEO of Tucows.
Tucows, a software and applications aggregator, paid about a quarter of a million dollars to pick up Kiko, which was offloaded via eBay after the founders became distracted and started working on new projects (ok, Google Calendar had something to do with this too).
So why did they buy it?
“A lot of little reasons,” says Noss, but one really big reason: “We needed the functionality, quite desperately, inside of our email platform and it was going to take us a long time to get it. Especially at the level of sophistication Kiko has.”
In an article called Kiko dives into the Web 2.0 deadpool, business model AWOL I pointed out the issues of developing these standalone web apps without a smart revenue model. It isn’t too surprising then that it has been bought purely on the basis of its functionality. And good functionality it has too – that was never in question.
In determining how much to spend, Noss said: “What was the value to Tucows of the time and the certainty? Of being in the market with this functionality six to twelve months earlier than otherwise? What was the value of having it be good for sure? What I can tell you for certain (and you'll be able to hear more details in an upcoming podcast) is that it was more than we paid!”
This was a 'get it now' deal.
Noss also noted that had the founders been ‘sold’ as part of the deal, the price may have risen “by a factor of ten”. But the founders are doing new things, backed by Y Combinator. The fact that they didn’t want to stay with Kiko “probably kept some of the natural buyers out of the process”.
That last point is an interesting one, as many acquisitions over the past couple of years seem to be as much about bringing in new talent as they are about acquiring new products / businesses.
Elliot explains more about the Kiko buy on the Tucows blog. We wish them well with the integration.