Intuit acquires Lettuce Apps for $30 million, plans to integrate the product with Quickbooks online
The M&A train continues to roll through the LA tech scene, this time turning an eye to the burgeoning SaaS ecosystem. Pando has learned that Intuit has acquired design-focused SMB order management platform Lettuce Apps. The all-cash deal came in at $30 million, according to sources close to the transaction, with additional stock-based retention bonuses paid to the startup’s employees. The deal will likely be announced later today.
This is the second such LA-based small business tool that Intuit has snatched up, following the company’s sub-$50 million acquisition of DocStoc in December. Collectively, these deals paint a picture of a company looking to become the go-to resource for small businesses that don’t have large IT departments, software budgets, or consulting firms on retainer.
Lettuce will be integrated into Intuit’s own SaaS-based Quickbooks online, offering small business customers another reason to transition from the company’s legacy desktop software offering to its future-minded cloud platform. For Intuit, that means recurring revenue, rather than a one-time purchase and long upgrade cycles.
The three-year-old startup wasn’t looking for an exit, Lettuce founder and CEO Raad Mobrem tells me. Rather, with over 30 percent month-over-month growth since late last year, the company was in the process of raising a Series B round of funding. Intuit, who was already a partner based on the companies’ Intuit App Center relationship, expressed interest in investing. The terms, and the integration opportunities apparently proved too attractive for either company to pass up, and this investment turned into an acquisition. Mobrem, however, declined to confirm the transaction terms.
Make no mistake about it, startup ecosystems and elite venture funds are not built on $30 million exits, but for a company that had raised just $3.3 million – from investors including Crosscut Ventures, Baroda Ventures, Double M Partners, 500 Startups, Zelkova Ventures, Telegraph Hill Capital, and Launchpad LA – this marks a healthy return for all involved.
Just as importantly for Mobrem, the product he spent almost half a decade building will live on, and his team will stick together, working out of the company’s same airy beachfront Venice beach office.
And with happy investors and a win under his belt, it's a good bet we'll see Mobrem back at the starting line in a few years. There are far worse outcomes.