Industry Insights

Syndicated News Buys Komfo From Sitecore as Social Media Management Consolidates, a startup out of Denmark that helps businesses manage their presence across social media and messaging platforms, has acquired a competitor in a wider trend of consolidation in the market for such services. It is buying Komfo from customer experience software developer Sitecore, which itself was majority acquired by EQT for $1.1 billion in 2016. is not disclosing the terms of the deal, Ulrik Bo Larsen, its CEO and founder, said in an interview. What he did say was that it acquired Komfo off its own balance sheet — has made a name for itself as one of the bigger competitors (maybe the biggest?) out of Europe against the likes of Hootsuite an Sprinklr in helping businesses of different sizes manage their social media presence. Its 1,500 customers include Carlsberg, Toyota, William Grant & Sons, Founders Entertainment, IWC Watches, and Coca-Cola, and it’s a business that has so far been strong enough that the company has not needed to raise more funding beyond the $40 million it has already picked up to do the deal.

However, from what I understand the company has received a number of acquisition offers from competitors and others in the wider tech world that want to be getting more active in this area, and so this will either mean more funding around the corner anyway, or another kind of liquidity event if can prove to be successful in its inorganic and organic expansion.

“When we compare ourselves to others in the space, and consider the avenues of how you can grow, everyone is talking about consolidation right now, private equity funds looking in, and so on,” Larsen said, positioning as one of the potential winners in that trend: “There is no doubt that we have the strongest metrics and more momentum than some of the others.”

While a lot of’s business to date has been around marketing and some advertising, the Komfo acquisition will add analytics and more advertising firepower to the mix. The bigger picture, Larsen said, is to become a one-stop-hub for all of a company’s social media needs from one platform.

“If you zoom out,m the digital front office is broken and needs to be transformed,” he said. “There are a lot of things that need to be built to do that and what we’re doing today is just a nugget.”

Similarly, this also speaks to why Sitecore would choose to divest. “It has been a pleasure working and partnering with Komfo over the last years and we wish the team well for the journey ahead,” said Rasmus Maltha-Smith, VP Strategic Projects, Sitecore, in a statement.

Consolidation is also a logical step when you consider that consolidating and offering a one-stop-shop is also what Sprinkler and Hootsuite have been aiming to do. Offering a hub for managing several networks and several functions is critical because the biggest platforms — for example, Facebook and Twitter — have also been building out significant businesses to provide some of these services directly, presenting another form of competition, albeit one with the caveat of coming from a walled garden.

“I don’t lose sleep over what Facebook and Twitter are doing,” Larsen said. “There will be a tool to leverage all of these across the different platforms. What specific platforms are doing also leaves out email and first-party website and conversations happening there and you cannot leave those things out.” (Note: this is not entirely true: Facebook is now offering a way for businesses to export the Messenger experience directly on to their sites, and this is only likely to grow if it sees traction.)

Nevertheless, “there will be a need for a tool to defragment and route all of these things “,” Larsen said.

The other important trend that this deal touches on is the changing face of Facebook and other social sites from another perspective: that of what these companies are prioritising for their viewers and in their business. Facebook, as one example, has been de-emphasizing how some pages (such as media sites) are coming up in their algorithms and there has been an overall push for companies to pay to promote their posts. On Twitter’s site, from what we understand, the company is now moving to charge more of the third parties that rely on Twitter data for their own enerprise services, as they look to build up and firm up a more diversified set of revenue streams around data.

These inevitably have a knock-on affect on the way that businesses will be able to use these sites, and also what role middlemen like, or Sprinklr and Hootsuite will play. One of the big growth areas, it seems, is messaging.

“We can see that the eyeballs are moving away from the News Feed in Facebook to somewhere else and that is to a large extent to the messaging channels,” Larsen said. “It took even me more more than a week to install the Facebook app on my new phone, whereas Messenger and Instagram were the first I added. Pulling that out to, we’re trying to make changes to make that experience exciting again.”

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