Comment by gkapur
16 hours ago
Interestingly, according to Axios, the price was pretty limited: "Amplitude (Nasdaq: AMPL) acquired CommandAI, an SF-based software user experience startup, for $20m (net of cash). CommandAI (fka CommandBar) had raised around $23m from Insight Partners, Itai Tsiddon, Thrive Capital, and BoxGroup."
I would be curious to learn more about the rationale to sell the business as I understand the strategic value to Amplitude. Interestingly, these next-generation digital adoption platforms have generally been pretty challenged.
Amplitude CEO here. To clear a few things up:
The number that was reported in term sheet / pro rata did not include any stock, which was a big part of this deal. The total consideration for CommandAI was north of $45M. We're working with them to issue a correction. Long story how the wrong number got reported- mostly too much telephone. It was also a good outcome for their investors in that they were able to return more than what was raised.
We at Amplitude approached the Command AI founders about joining Amplitude. They had a bunch of runway and good growth numbers. They were initially planning to raise another round of fundraising to continue to scale their business instead. It took some time on both sides to figure out what the win-win combination would look like.
We're honored that they decided to combine with Amplitude and are excited about what the combined products look like.
Command AI co-founder here. What I'll add to Spenser's nice comment is that there was this strange tension when we were deciding to do this between: (1) Feeling like the only right outcome for a growing startup with runway is to keep going and try to build a massive independent company, (2) Realizing that we can probably grow faster as part of Amplitude (obv with less upside capture)
Obviously if your growth is so epic and you're a top 1% company, the choice is obvious. But there are a lot of companies that are doing well outside of that group that I don't think allow themselves to consider the acquisition route. We were like that until Amplitude reached out and we got good counsel to seriously consider their offer.
Thanks for giving a straight answer on the acquisition price.
Having a little clarity on outcomes like this can help founders make better decisions, really appreciate it.
Thanks for the transparency and thoughts!
You almost don't have to snoop for details to have a good guess at what happened. If the acquisition announcement is the first time in a year or more that you're hearing from this company and they omit the sales price, you can bet this isn't the exit most parties wished for. Although by this stage the founder(s) is probably happy to find a buyer who will retain their team.
> you can bet this isn't the exit most parties wished for. Although by this stage the founder(s) is probably happy to find a buyer who will retain their team.
I've seen a startup that was bootstrapped 10 years ago but took on too much money and ended up getting acquired for "undisclosed sum" but at the same time everybody knew the investors were just recouping their money while founders got nothing (they had sold their equity for raising more money as their costs were way up but nobody was buying their product). Cue local news reporters don't know the nuances so they'll just announce "Startup X acquired by Y, wow!"
Founders place a lot of emphasis on getting "acquired" but there is roughly 95% chance of you selling at breakeven where the terms leave you with a year's worth of salary as a junior SWE
Get ready to see a lot more of these "acquired" news coming out in the near future. something around less than 1% chance of getting more money than you put in.
Startup has horrible odds especially if you are building a simple GPT wrappers
What’s interesting is how much it contrasts with TechCrunch’s story: ‘Most of Command AI’s 30-person, San Francisco-based team will be joining Amplitude. Command AI’s co-founder and CEO James Evans wouldn’t reveal the terms of the deal, but said candidly that an acquisition wasn’t something he’d been planning on. “Our growth was great and we had plenty of runway,” Evans told TechCrunch. “We weren’t out shopping ourselves or anything. But when Amplitude reached out a little while ago — this summer — we got really excited about the combination and became convinced that we could grow faster and reach more users together.”’
People want to save face. Some more than others. I also read the TC article and thought they were trying a bit too hard to make this seem like a good outcome.
Nothing against the founder. It's just how the game is played. And there's little to gain from deviating from the norms.
Edit: It benefits not just the founder’s ego but also the future career prospects of the employees. Big difference in your engineers being able to say “I worked at X all the way until they got acquired!!” and “I worked at X but the product was so unsuccessful we had to have a fire sale.”
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