Hipcricket Acquired by Augme for $44.5M to Combine Mobile Marketing Forces

8/4/11Follow @curtwoodward

[Updated at 12:15 Pacific with Hipcricket comment] OK, it’s officially M&A week in Seattle. Today we have Kirkland, WA mobile advertising software company Hipcricket being acquired by New York-based Augme Technologies for $44.5 million upfront—$6 million in cash and the balance in Augme stock. The price also could climb by another $27.5 million if Hipcricket reaches certain goals.

As we reported a couple of years ago, Hipcricket saw its business continue to do well even in the worst parts of the recent economic collapse. There are two big factors behind expansion in mobile marketing generally: the continued growth in consumer mobile devices, and marketers’ hunger for ways to measure the returns on their ad spending.

But as Hipcricket co-founder and CEO Ivan Braiker told us previously, his company saw its analytics software as a trump card, keeping Hipckricket ahead of the “new vendor every day that gets into this.” The company was founded in 2004, and has worked for a roster of big-name clients including Nestle, KFC, and NBC. It’s privately held and backed by some prominent investors, including Joe Schocken from Seattle-based Broadmark Capital.

The Hipcricket team will be staying in place, both in Kirkland and at the company’s branches in New York, Dallas, Chicago, Los Angeles and Mexico City, according to the news release. In a follow-up interview, Braiker and Hipcricket chief operating officer Eric Harber said they also plan on expanding their staff. “We’re looking for great people now, and we’ll be doing even more  of it,” Braiker says.

Braiker will become the president of Augme and join the company’s board, while Harber will be Augme’s COO. “They were emphasizing and underlining two or three times: we don’t want to mess with it. We want you guys to come in here and help drive the company,” Braiker says.

Hipcricket was able to survive the Great Recession, its leaders said, by riding the explosive growth in mobile devices, social media, and the truckloads of data that consumers are generating. When the company started, the iPhone was still a couple of years away—meaning Hipcricket has been in line to capitalize on the transformation from text and e-mail to the new world of mobile Web and app-based marketing.

They don’t see it slowing down much. A big driver behind consolidation deals like today’s sale to Augme is the fact that major clients want to handle increasingly fragmented mobile advertising channels with one trusted vendor, Hipcricket’s leaders said.

“A bigger brand is demanding that they get more and more from a trusted technology and services provider, and that’s the role that we play,” Harder says. “And we’re doing that more and more with customers like Macy’s, and MillerCoors, and Clear Channel.”

The deal’s expected to close at month’s end, pending shareholder approval. There’s been a mini-flurry of acquisitions in the Seattle area this week in gaming and advertising. Yesterday we saw comScore buying Seattle-area advertising firm AdXpose, and game studio Griptonite being snapped up by Glu. The week started with Sony buying local game studio Sucker Punch.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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