Facebook is getting closer to finalizing an acquisition deal with the customer service chatbot startup Kustomer, according to a report in The Wall Street Journal (WSJ) citing sources.
The deal could close by the end of the day on Monday (Nov. 30) and would value the New York-headquartered startup at more than $1 billion, the sources said. Following a private funding round last year, Kustomer was valued at $710 million.
Founded in 2015 by Brad Birnbaum, chief executive officer, and Jeremy Suriel, chief technology officer, Kustomer is an omnichannel software-as-a-service (SaaS) and customer relationship management (CRM) firm that specializes in chatbot technology.
Shopify teamed up with Kustomer in July to advance more efficient operations. Kustomer said its platform will help retailers on Shopify automate 40 percent of interactions. The collaboration will also enable businesses to track all customer interactions.
Earlier this month, Joe Simons, chairman of the Federal Trade Commission, said when big companies acquire startups, that is a red flag signaling possible anti-competitive practices.
Some fear that innovation could suffer if regulators come down on mergers and acquisitions. Simons said there could be blockades to end some usual routes to growth.
“A monopolist can squash a nascent competitor by buying it, not just by targeting it with anti-competitive actions,” Simons said earlier this month.
In a PYMNTS interview, Jim McCarthy, president of i2c, said global regulatory forces are largely over-reacting when it comes to competition law and Big Tech and the results could have consequences. He said the intersection of data, privacy, and consumer protection make the issue difficult, and the solutions offered haven’t had consumers’ interests in mind.
The Pandemic Anti-Monopoly Act was introduced earlier this year by Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez and calls for an M&A moratorium involving companies with more than $100 million in revenue or financial institutions (FIs) with more than $100 million in market capitalization.