Updated at 6 p.m. with details from interview with Limeade CEO Henry Albrecht.
Employee well-being technology company Limeade has agreed to acquire TINYPulse, a startup specializing in quick employee surveys and feedback, bringing together two Seattle-area companies focused on using technology to create better workplaces.
Limeade, based in Bellevue, Wash., and traded on the Australian stock market, is acquiring Seattle-based TINYPulse for $8.8 million in cash, the companies announced Monday afternoon. The deal includes the possibility of additional payments based on the performance of the TINYPulse business in the 18 months after the deal closes.
TINYPulse was founded in 2012 and raised a total of $9.5 million in funding as an independent company, at a valuation of $70 million in its most recent funding round in 2015, according to data collected by venture capital database PitchBook.
Limeade focuses primarily on serving larger enterprise companies, and saw an opportunity to expand its customer base with the acquisition given TINYpulse’s traction among mid-market companies, said Limeade CEO Henry Albrecht in an interview with GeekWire after the announcement.
TINYPulse’s focus on technology for listening to employees was a key driver of Limeade’s interest, Albrecht said.
“Over time, we see a lot of opportunity for creating great employee experiences that have well-being at their heart,” he said, calling listening “a core element” of that effort.
All of TINYPulse’s 70 employees, primarily in Seattle and Vietnam, are expected transition to Limeade following the completion of the deal. That includes David Niu, the TINYpulse founder and CEO; and Dave Smith, the company’s president and chief operating officer.
“Limeade and TINYpulse are two Seattle-area companies focused upon shaping the future of work,” Niu said in a statement. “The entire TINYpulse team is thrilled to unite and bring our powerful listening capabilities to the most important thing of all: employee well-being.”
TINYPulse posted $6.5 million in revenue in its 2020 fiscal year with an adjusted loss of $1.2 million in earnings before interest, taxes, depreciation and amortization, according to the Limeade acquisition announcement.
The broader market for employee experience technology has been booming due in part to the trends sparked by the COVID-19 pandemic, as companies look assess and improve the productivity, job satisfaction, engagement, and overall health and well-being of their employees. Limeade last week announced a partnership with Microsoft’s Viva employee experience platform.
Limeade, founded in 2006, made its initial public offering on the Australian Securities Exchange in December 2019. The company had $31.3 million in cash on hand as of March 31, according to its first-quarter investment call. Its stock (LME) is trading at 0.74 on the ASX, down more than 52% year-to-date.
The deal is scheduled to close by the end of the month, Albrecht said. It’s part of a boom in mergers and acquisitions as the tech industry emerges from the pandemic.