BT announced that it has acquired Silicon Valley based Ribbit for $105 million in cash. On July 9 we reported that Ribbit executives were telling friends the deal was done while simultaneously denying it to the press. One thing we got wrong was the price, though. We were hearing $55 million, $5 million more than competitor GrandCentral managed to wrangle out of Google. Ribbit got nearly double that.
Ribbit has raised just $13 million from Allegis Capital, KPG Ventures and Alsop Louie Ventures. That makes this exit nearly a ten-bagger just two and a half years after launch.
BT will keep the Ribbit team intact in Silicon Valley and use the acquisition to try to win mind share among developers. Ribbit is a platform for creating voice-based applications over the Internet. BT will now be able to run those applications over its backbone network at a lower cost than Ribbit was able to lease those lines (calls to landline and mobile phones need to go over regular telephone lines at some point). Ribbit is an attractive way for BT to ramp up software revenues. And its soft switch technology (a software-based telephone switch) could start to pop up throughout BT’s network, where it would add more flexibility and create cost savings.
Whether or not developers want to rush into the arms of a telco is another question. By becoming part of BT, Ribbit will no longer be seen as a neutral player. And developers may fear getting locked into a relationship with one large telephone company, especially if they are trying to create apps to displace telephone companies in general. BT and Ribbit will have to overcome that fear by being more open than anyone else and offering the best platform for creating voice-enabled apps. Skype and Google’s GrandCentral are other potential competitors.
Update: I just spoke with Ribbit CEO Ted Griggs and JP Rangaswami, a managing director at BT. Griggs says:
At the end of the day we are trying to make BT into a software company. BT has never acquired a pre-revenue company before.
Rangaswami emphasizes that what BT is buying is the team, the technology, and access to developers in Silicon Valley (Ribbit has already attracted about 5,000 to its platform). He adds:
It is very unusual for us to even be making a play across the pond. It is not an experiment.
We wanted to up the ante in the global communications platform trade. We could have been an AT&T and provide pipes. We could have been an Apple and innovate around the pipes. Or we could have been a Google and serve ads around the pipes. But as we envisioned the world of open-based platforms, it had to be global and scale digitally, so it had to be about software.
Below is an Elevator Pitch from Ribbit founders Ted Griggs and Crick Waters explaining what Ribbit does:
going ribbit ribbit all the way to the bank, cha-ching
I’m wondering if the Bay Area housing market will ever match the Bay Area tech companies’ prices, like it used to be. *smirk*
Those golden handcuffs are probably quite long-lived at that price.
Great logo!!
I always liked their concept (not new) and execution (definitely better than many startups).
Their Smartswitch technology is pretty cool.
Grrr. Why didn’t anyone tell me their was other Grand Central like sites around. I want grand central so bad (at least I did before Google let it rot). Does anyone have an extra beta invite for Ribbit or can they point me in the direction of other sites like it? Thanks.
Check out Jaduka. Dynamic API web services built on top of the parent company’s (NetworkIP) telephony platform. – Versatile and EASY to integrate.
Go to http://www.youmail.com , they do cool stuff on cells.
i never understood if you can pay 100 million for a company
then why dont you build the service yourself
There is a reason why mega-corps with unlimited resources (people, capital and customers) keep coming to Silicon Valley to find their future in great young companies like Ribbit. The combination of risk-averse culture, size and an inability to forsee a future without them in it makes it difficult for many corporations to initiate or drive the types of disruptive change that thrives here. Start-ups – unecumbered by history – get to work with a clean piece of paper. An advantage missing in most major corporation.
The good news for us in Silicon Valley is that we are on right side of the value creation equation. This will keep the corporations coming back to Silicon Valley for their innovation. The entrepreneurs of Silicon Valley are the out-sourced R & D department of many leading corporations.
Congratulations to the Ribbit team on a big vision pursued with passion and what will hoepfully be the first of many successes.
Congrats to RIBBIT! May they strive and thrive. 5,000 developers…wow…
Also congrats to the investors …Allegis Capital and others
If you have a sizable amount of money and you want a car…do you go buy one that already exists for which someone has sweated the details, or do you set out to build one? The first option gets you on the road now, the other gets you on the road later…maybe.
Holy cow Batman. Just nutz for a company with less than $1 million in revenue.
@Erick: Our theory is that the rumor-mongers must have been thinking in pounds sterling, since the price you “reported” was only accurate if you denominated in that currency. As well, the company was founded two years ago. It launched the Ribbit platform in September, 2007 and the Amphibian application in January, 2008.
We’re proud of how disciplined the company was in not responding to the rumors. And we’re thrilled that British Telecom sees the long term value in the company, although we do wish we had been able to capture even more of it for ourselves!
BT buys ribbit for $105M – Surprising or Not[VOTE]: http://snurl.com/374r7 [www_thriveorfail_com]
I really still don’t get this ribbit thing but hey congrats on the sale!
Check your math on the “ten-bagger” exit. It would be (close to) a ten-bagger if the investors owned the whole company. Pre-money was probably $20-$30M for this deal, so three-bagger since raising money is more likely. Still- thems some nice bags.
correct, hypo glyc. Erick, this was no more than a “three bagger” unless the investors managed to own 100% of the equity…
@hypo glyc
thanks for bringing the logic&reason – now have some sugar
“Ribbit has raised just $13 million from Allegis Capital, KPG Ventures and Alsop Louie Ventures. That makes this exit nearly a ten-bagger just two and a half years after launch.”
Hypo is right, it doesn’t sounds like a 10x return. Since that was only their capital raised. Let’s make sure these things are covered right. Congrats to the team there
WoW! Too much RS around now… $$$$$$
I don’t think this is a smart move for British Telecom, but surely the Ribbit guys are very happy.
The kind of solution Ribbit is offering will came soon as part of Adobe Flash or technologies like Silverlight, so currently the advantage is time, but it’s worth 105 millions?
That’s great news for Allegis Capital I just met before they invest in Ribbit. But it is also great news for http://www.digitrad.com , even more disruptive in its Voice 2.0 approach !
Craig I forgot: CONGRATULATIONS !!
Micha
>>especially if they are trying to create apps to displace telephone companies in general.
Please don’t write nonsense like this.
@srw Silverlight is all hype and promise, it doesn’t even have a Microphone class; perhaps when it grows up it might actually be worth looking into. Adobe Flash may give you socket connection and voice control with a pretty UI, but you need a complete platform/backend/switch support to actually make that useful.
Ribbit seems to be a bit ahead of the other competitions. For those developers that are interested in Voice 2.0, this is great news.
Congrats to Ribbit! Looking forward to seeing great things from the team there.
Digitrad has its own Class 5 softswitch, a flashphone, a set of APIs and its own range of Dids. Our customers are already using the open Voice 2.0 platform and we are working to open soon the APIs on the web for all developers.
It is just the beginning of mashup applications with voice and I believe website like social networks will integrate them more and more indpendently from the technology used. It doesn’t really matter wether it is flash, silverlight or html.
Interesting play by BT, good result for Ribbit. Don’t think we’ve seen the last of the Telco 2.0 transform plays either.
Our thoughts in a lot more detail here:
http://broadstu...-Telco-2.0.html
right price 55m – wrong currency £55m (?)
Congratulations to the Ribbit team
I think that’s better for Ribbit. I wish their team good luck. They do offer great services, by the way.