EBay’s $135M Acquisition of Where Could Drive PayPal’s Mobile Future; Boston CEOs React to Another Silicon Valley Buyer
[Updated 4/24/11. See comment below] Chalk up another $100 million-plus purchase of a Boston-area mobile technology company. First there was m-Qube, then Third Screen Media, Enpocket, Starent Networks, Quattro Wireless, and now, Where. Their acquirers read like a who’s who of tech giants: VeriSign, AOL, Nokia, Cisco, Apple, and now, eBay.
Indeed, Boston-based Where’s purchase by eBay (NASDAQ: EBAY), announced yesterday, is at least the sixth big mobile acquisition around town in as many years. Financial terms weren’t given—the deal is expected to close later this quarter—but a source with knowledge of the deal confirmed the price was about $135 million (as first reported by Mass High Tech and BostInnovation). I’ve also learned that Where was considering other options—including an acquisition bid from Research In Motion (RIM), the BlackBerry maker, as well as further financing from venture investors.
Where (formerly called uLocate) started in 2003 with the idea of providing location-tracking for GPS-enabled cell phones. The company re-launched in 2007 around a new set of location-based services, with backing from Venrock, GrandBanks Capital, and Kodiak Venture Partners. (The firm has raised around $20 million since the re-launch.) In recent years, Where has released a local search and recommendation app for mobile devices, and rolled out a location-based advertising network. More recently, it has gotten into daily deals and merchant services. The company has grown from 30 to 120 employees since early 2010, and in February, it said it had been profitable for the preceding six quarters.
Where’s management team didn’t reply to a request for comment yesterday (the eBay PR clamps must be tight). But eBay spokeswoman Kathy Chui confirmed that Where will report to the PayPal division of the San Jose, CA-based e-commerce giant. The acquisition is part of eBay’s bigger strategic plan to strengthen its position in mobile and local commerce, Chui says. And the deal builds on eBay’s recent acquisitions of local shopping startup Milo, barcode-scanning mobile developer RedLaser, and online retail giant GSI Commerce. Meanwhile, the Where team will stay in Boston and “plans to grow,” Chui says, but she declined to give specifics.
A little more background on the deal: According to Chui, Where’s CEO Walt Doyle was meeting with the PayPal team over the past few months, working on a possible integration between the two companies’ services. The transition to acquisition talks “happened very quickly,” Chui says. “There may have been coffee and beer involved.” (And, if my sources are accurate, competing interest from RIM and VCs probably upped the urgency of the deal—and the price.)
For its part, PayPal said in a blog post, “As a first step, we plan to integrate PayPal into the Where mobile app to make it even easier for PayPal customers to take advantage of the local deals.” That’s a boring way of saying PayPal wants to use Where to turn your smartphone into a … Next Page »