My local followers here in Minnesota may have heard about the acquisition of local startup SMB:LIVE this past week. The company was known more in these parts by the name of its service, CloudProfile, which had gotten some local buzz due to a test program it had going with Best Buy. In fact, the day the acquisition was announced, the brand-new March issue of Twin Cities Business magazine landed on my desk, with a glowing piece on the company, under the headline Found in the Clouds. 
So much for the timeliness of monthlies: just the day before, the company had ceased being an independent Minnesota firm, becoming part of a high-flying Southern California firm, which has filed for an IPO.
And I now have the details of what the acquirer — ReachLocal — paid for the firm. I simply asked my friends at socalTECH.com, a great site that covers the tech community out there, where ReachLocal is based. And, thanks to my prodding late yesterday 🙂 they took another look — proceeding to discover just the data I was looking for, which was in a filing they hadn't checked till they saw my email.
So, here's the deal: the purchase price was $2.8M in cash, plus up to $5.7M dependent on milestones — for a total of $8.8M, including assumptions of some liabilities. That's according to Ben Kuo, editor at socalTECH.com, who told me ReachLocal had buried the information in an S-1 addendum, and had not announced it in their earlier news release.
Not a bad payday for a firm that had barely released their site into the wild. Congrats to founder and CEO Alex Hawkinson. (Read more about him and his small team here.) For more on the deal, see socalTECH's coverage that was updated last night. And here's another site in SoCal with a page that groups socalTECH's previous stories on ReachLocal, including their filing for an IPO in late December.
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Congrats to Alex Hawkinson who was on the MIMA Panel with me a couple of weeks ago and hinted then at this news. I’m hoping the team stays in place in MSP & helps our innovation market raise its stature in the SMB vertical.
SMB:Live is not technically a local company or a startup. It has been around for years and was based in Reston, Virginia. There has been a big part of the team building CloudProfile located in Minneapolis (hey our offices 🙂 but I just wanted to clear that up.
@Ben – Yep, certainly knew that. You’ll recall I met with Alex several months ago, cuz I emailed you right after that. I figured people would get that background info when they hit the link on the company About page. And the TCB article also covers that. But I think it’s fair to say it became MN-based when Alex relocated here.
@Kim – Good point, agreed. I’ve asked Alex for his comment, and I’m assuming he’s not relocating to La-La Land — at least in the near-term.
Yeah – there will be a (growing) Minnesota-based development team in place for the foreseeable future – located above the Bulldog NE as the Twin Cities Business article so nicely points out 🙂
go, Nordeast 🙂
That’s a great price for an early-stage company. Good to see SoCal coming here for innovation. Who is going to be next?
I have my picks – but I’ll keep them quiet 🙂
hipsters!
Nice scoop Graeme-rock!
$8.8 million seems like a nice single or double, and the Minnesota tech scene could sure use more singles and doubles.
Any idea how much in revenue SMB:LIVE was running at per month, and what their expected growth rate was? Curious how this relates to their valuation.
Dunno, Rob. Alex – you out there? maybe you can tell us?
Reach local is a scam. They take your money and deliver not very much in return. Why is it that day do not provide the data generated by the campaign to the advertisers????
Why is it that they allow ‘browse’ search terms as opposed to ‘buy’ search terms on campaigns? Why is the CTR on their ads a miserable 0.5% on average? The whole set up is one big scam. To say nothing of click fraud that they encourage.