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Startup Grind

5 Reasons Why Atlassian Bought OpsGenie for $295M

Glocal is a podcast on locally incubated global startup success stories.

OpsGenie (featured in Ep.2) is an IT incident management software that was bought by Atlassian for $295M at around 20x revenue multiple (my guesstimate). Below are some of the potential reasons from my conversation with Berkay on Glocal.

1) Focus on collaboration and orchestration

OpsGenie centered its attention on people side of things, rather than focusing on predictive models or AI like its competitors. OpsGenie’s model involved everyone in the organization, making it more suitable for Atlassian.

2) Product synergies

Fully integrating seamlessly with the rest of Atlassian suite, OpsGenie brought efficiency to company operations. OpsGenie team already felt the need to build similar products that are critical for before and after an incident, like Confluence or Jira, but obviously did not have enough resources. OpsGenie played an ecosystem game from its initial days and was already visible to potential acquirers.

3) Cultural harmony

OpsGenie bootstrapped for a long time with close customer feedback loops and continuous iterations on the product. Very similar to how Atlassian grew up until its IPO 4 years ago.

4) Hot market

It is hard to estimate the potential size of the incident management market, but the early adopters rely heavily on OpsGenie to minimize downtimes and incident management tools will fully penetrate the market, much like cloud today.

5) Timing and team

OpsGenie does not have a non-repeatable technology or a very large customer base that would make it an attractive acquisition target. But building such a product in a short time is impossible and that lag in timing meant losing potential early adopter enterprise customers. OpsGenie has a killer team that has been working together in the infrastructure space for almost 2 decades — also very hard (if not impossible) to build internally from scratch.

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Stories, tips, and learnings from and for startups around the world. Welcoming submissions re: startup education, tech trends, product, design, hiring, growth, investing, and more. Interested in submitting? Visit our submission form here: https://airtable.com/shrShpeN89HrzCzOB

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Enis Hulli

Enis Hulli

Partner @500Startups Istanbul, enis@500.co, Glocal Podcast theglocal.co

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