Facebook Adds CRM Platform With Kustomer Buy

The deal “could provide businesses and customers with more support for interactions that occur on Facebook and its other apps."
Matthew HellerDecember 1, 2020

Facebook has agreed to acquire Kustomer, a customer relationship management startup, in a move to boost its offerings to businesses that communicate with customers through its messaging apps.

Kustomer’s omnichannel CRM platform enables businesses to manage customer conversations across multiple services using one dashboard. It has presented itself as an alternative to other customer service software companies like Zendesk and Oracle.

Terms of Facebook’s acquisition of the company were not disclosed though The Wall Street Journal reported that it valued Kustomer at a little over $1 billion.

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The deal “could provide businesses and customers [with] more support for interactions that occur on Facebook and its other apps, such as WhatsApp, Instagram and Facebook Messenger,” The New York Times said.

According to Facebook, more than 175 million people now contact businesses via WhatsApp and the number “is growing because messaging provides a better overall customer experience and drives sales for businesses.”

“It’s a better experience than waiting on hold, than not knowing if your email has been read,” Matt Idema, chief operating officer of WhatsApp, said.

As CNBC reports, Facebook has primarily acquired consumer-centric companies. But the social media giant has been making a push into what CEO Mark Zuckerberg calls “social commerce,” launching Facebook Shops, which lets businesses create online stores through Facebook and Instagram, in May.

“By bringing Kustomer into the fold, Facebook will be providing small businesses that use its service to advertise and sell goods more features to close sales through the social network’s services,” CNBC said. “This should seemingly lead these businesses to spend more on Facebook advertisements.”

Facebook makes nearly 99% of its revenue from advertising.

According to the Times, the coronavirus pandemic has boosted demand for managing digital relationships with customers, which, in turn, has fueled a boom in deals for the makers of customer relationship software and workplace collaboration tools.

“It was going to happen naturally. It’s just been accelerated by Covid,” said Brad Birnbaum, a founder of Kustomer. “Instead of investing in expensive storefronts and retail locations, companies are investing more in digital tools and experiences.”

(Photo illustration by Jakub Porzycki/NurPhoto via Getty Images)