Exclusive: Lithium Technologies to Acquire Klout
The deal is signed but not closed, said sources. And, while the numbers are fuzzy given they account for a mix of cash and Lithium private stock, the acquisition is “in the low nine figures” — that is, at least $100 million.
It’s a dead-on fit in terms of topic focus for the two companies, but it’s also a save for San Francisco-based Klout, which had two years ago raised a $30 million Series C round from investors including Kleiner Perkins, Venrock and Institutional Venture Partners, for total funding of more than $40 million. Klout CEO Joe Fernandez has been telling a tale of redemption in recent months, after his company became a bit of a whipping boy for criticism of the vanity of social media.
Lithium provides social customer experience management software for the enterprise. In September, the San Francisco company said that it had raised $50 million in “pre-IPO mezzanine financing,” bringing its own total above $150 million from New Enterprise Associates, Benchmark, Shasta Ventures and others. Its customers include AT&T, BT, Best Buy, Indosat, Sephora, Skype and Telstra. Because it is likely to go public, the price for Klout could be more (or less).
Klout’s business focuses on analyzing who is influential in social media, which is simplified into a score on a scale of 100. The Klout algorithm has been tweaked over the years, especially after scrutiny of why tech pundit Robert Scoble had a higher Klout score than U.S. President Barack Obama. (The reason? Back in 2011, Obama needed to get himself retweeted more.)
The company has tried multiple products and business models around that idea, including “Klout Perks,” where companies give promotions to people they hope to tweet about them; data licensing deals with Microsoft’s Bing and others; and just last week a new content product that suggests stories for people to share in the hope of raising their Klout scores.
Re/code has reached out to both Klout and Lithium for comment, but have not heard back as yet.