Vista Equity to Acquire Applause, as App Testing Firm Eyes Profits

The rise of smartphones, wearables, and other Internet-connected devices has enabled Applause to build what it says is a thriving business helping companies like Facebook and Starbucks test their apps and other digital products. Now, the decade-old firm, a stalwart of the Boston tech scene, intends to boost its growth with the help of a new owner.

Framingham, MA-based Applause announced today that it has agreed to be acquired by Vista Equity Partners for an undisclosed price. Applause declined to comment on whether Vista will own 100 percent of the company’s shares once the deal closes, which the companies said is expected to happen “in the coming weeks.”

This summer, several other Boston-area tech companies that got started in the late 2000s or early this decade have been acquired. They include Digital LumensDragon Innovation, Kinvey, and Intrepid Pursuits.

Applause previously raised $115 million from investors, including Accenture, Credit Suisse, Goldman Sachs, Longworth Venture Partners, and MassVentures.

The company’s competitors include Perfecto Mobile—also based in the Boston area—as well as UserTesting and Microsoft-owned Xamarin.

Applause says its business is humming. Its annual revenue run rate is around $100 million, and the company projects it will become profitable next year, according to an e-mailed statement attributed to CEO Doron Reuveni (pictured above). With Vista’s backing, Applause aims to increase its share of the market for digital testing, user feedback services, and providing market insights.

Vista plans to keep Reuveni and the rest of Applause’s executive team in place after the acquisition closes, according to a press release. The company currently employs 330 people worldwide and is hiring, according to the e-mailed statement.

Originally known as uTest, the company got started with the idea of crowdsourcing the quality assurance process for software developers. Business started to pick up around 2009, with the rise of mobile and social apps. The company later changed its name to Applause and extended its testing services to wearables and other connected devices.

Applause says it works with a network of more than 300,000 professional testers located around the world, who get paid for providing useful feedback about Applause’s customers’ digital products and for reporting glitches and other issues. (Last September, Reuveni told Xconomy that Applause paid out more than $25 million to its testing community in the previous year.)

The projects aren’t always as simple as poking around a website or exploring the features of a mobile app. Testers perform tasks like trying out the online ordering—and subsequent order pick-up—experiences for restaurants, retailers, pharmacies, and grocery stores. They have even test-driven apps—literally—for smart cars and snowmobiles, Reuveni has said. (Passengers performed the digital interactions so the driver could focus on driving—safety first, folks.)

“The key takeaway is the digital experience happens anywhere and increasingly intersects with ‘real’ world experiences,” Reuveni told Xconomy last year.

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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