Hootsuite acquires Montreal’s Heyday for $60M to harness its conversational AI tech
When “Hootsuite comes knocking on your door… you listen," said Étienne Mérineau, Heyday co-founder and CMO.
Hootsuite announced that it’s acquired Montreal’s Heyday, a conversational AI platform that helps brands engage online shoppers through 1-to-1 messaging, for $60 million. It’s Hootsuite’s second acquisition of the year and 14th since 2010. The social media management company acquired customer engagement platform Sparkcentral this past January.
This latest acquisition comes as online activity and the use of social media has increased dramatically since the start of the pandemic. Hootsuite’s Digital 2021 Report found that over 4.2 billion active social media users are spending on average two hours and twenty-five minutes a day on social and messaging platforms.
“Social is the new interface of commerce and customer care,” said Tom Keiser, CEO of Hootsuite. “Modern day brands have to manage a multitude of daily interactions and conversations at scale—which is impossible to do without AI automation. With the acquisition of Heyday, Hootsuite will now give AI capabilities to marketing, sales and support teams globally so they can deliver exceptional experiences at scale.”
Founded in 2017, Heyday offers an enterprise-grade customer messaging platform that integrates with e-commerce and social platforms like Facebook Messenger, WhatsApp and Google’s Business Messages. The startup works with global brands like Lacoste, Decathlon and Cirque du Soleil. Heyday raised $2 million in 2019 led by Innovobot, with participation from Desjardins Capital and other strategic investors.
Over the past year as retail underwent a pandemic-driven digital transformation, demand for Heyday’s product skyrocketed. This led the company to raise a $6.5 million seed extension this past March. The extension included a loan provided by Investissement Québec, a convertible note from Innovobot and Desjardins Capital, as well as investment from several angel investors according to past reporting from BetaKit.
Why the acquisition makes sense
As to why the company decided to sell to Hootsuite, Étienne Mérineau, co-founder and chief marketing officer, told Vancouver Tech Journal that when “Hootsuite comes knocking on your door… you listen.” Mérineau said that the space they’re operating in is consolidating and moving fast, and once conversations began with Hootsuite, it “was just really clear, the alignment, the vision, the culture—everything was a huge fit.”
“Then it became a question of…. on our path to hypergrowth, do we feel we can go faster with institutional investors on one side?” Mérineau said. “Or can we go faster with a giant like Hootsuite? And because of all the reasons that I mentioned—culture, vision, fit, the sheer scale and reach of Hootsuite, and brand equity and positioning—it just made so much sense on all levels: business, product, marketing, etc.”
Hootsuite’s corporate development team looks at 30 to 50 businesses a quarter, but what Heyday offers—AI and social commerce—fit neatly into the company’s M&A and partnerships roadmap, explained Richard Hungerford, vice president of corporate development and strategy. Hootsuite started having conversations with Heyday around eight months ago and quickly decided that it was a company they wanted to do business with, at least from a partnership perspective. “But ultimately,” Hungerford shared, “we wanted to own this space. This is where we feel there’s a huge wave happening.”
Once Hootsuite got into formal conversations with Heyday, they had to move fast, as the Montreal juggernaut had multiple options on the table including raising more capital. In fact, Mérineau told Vancouver Tech Journal that his team spoke to more than 100 people including strategic acquirers and VC firms.
“We were in active discussions with a lot of people,” said Mérineau, “which was great for us obviously. We kind of had a good position where we weren't forced to sell… but it was really the opportunity that just made so much sense.”
Company acquisition is the new talent acquisition
While Heyday’s product fit Hootsuite’s roadmap, it also appealed to Hootsuite due to the company’s location and talent. “You know, we're a Canadian-based company. We haven't done a lot of acquisitions in Canada, and we want to expand in Canada,” said Hungerford. “We want to have engineering product hubs, and this allows us to really create a centre of excellence in Montreal. Their expertise is AI. So for us, we couldn't ask for anything better. Canadian, AI and a strong leadership team.”
Hungerford wanted to stress that it wasn’t an acquihire. However, he added, “The ability to attract top talent in Montreal with a great company is huge for us.”
The era of digital M&A
As retailers have been forced to up their online game, so too have M&A departments. Hootsuite closed the deal having never met any of the Heyday team. Mérineau believes this wasn’t necessarily a bad thing and may have even been a net positive.
“We ended up chatting away more via Google Meet and having probably more conversations than we would have had in real life,” he said. “But spread over a few months, and that in a way, I think it was a pro more than a con because we really had more time to gauge the culture fit [and] the personalities of the leadership team and their goals, their vision, which is something that you go over during dinner maybe for three hours—but anyone can be on their best behaviour for one night.”
Accelerating the roadmap
39% of social media users expect a reply from companies within sixty minutes, according to a study by Edison Research; however, the average response time is five hours. The goal for Hootsuite now is to combine automation and AI, so brands can respond with personalized responses to customers at scale in real-time.
Hootsuite’s acquisition earlier this year of Sparkcentral established the foundation for these capabilities, and now Heyday will augment the tools their customers can use to connect with customers through all stages of a buying journey.
“It used to be… e-commerce has long felt impersonal like you're just left on your phone in front of a scrollable catalog of products,” said Mérineau. “I think it's time in 2021 that it becomes more personalized and… AI can act by removing the noise and all the repetitive questions and can reroute the conversations that matter to human agents and therefore deliver that level of personalization.”
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