The startup’s cofounder and chief technology officer, Vinay Hiremath, is of Indian origin, while cofounder and president Shahed Khan has Pakistani and Indian immigrant parents.
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Hiremath was a college dropout from Illinois who moved to California in 2012 to work as an engineer. He met Khan while at Backplane, a social network builder. The duo had been building out the company with Loom’s cofounder and chief executive Joe Thomas since 2016.
The video messaging platform helps 25 million users communicate through instantly shareable videos across 200,000 companies such as HubSpot, Atlassian, Uber, GrubHub and LinkedIn.
The three founders as well as current and former employees are estimated to have benefited with $400 million from the sale, EquityZen founder and chief strategy officer Phil Haslett said in a LinkedIn post on Thursday. EquityZen is a secondary-markets platform that lets startup employees sell their equity to institutional investors before a company goes public.
Assuming about 10% of the proceeds ascribed to current and former employees, the founders have bagged $300 million for themselves, he added.
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While the gains are significant, the San Francisco-based startup’s price is down 35% from its last valuation of $1.5 billion on which it had raised $130 million in May 2021.On similar lines, Instacart co-founder Apoorva Mehta was reportedly checking out with $1.1 billion following grocery-delivery startup’s initial public offering in September 2022.
Since inception, Loom has raised a total of $203 million from top-tier investors including Kleiner Perkins, Sequoia Capital, Andreessen Horowitz and the founders of Instagram and Figma, among others. It is not clear yet as to how much money investors made from the sale.
The $975 million in offer for Loom includes its cash balance. In cash, the total consideration stands at about $880 million, with the rest in stock. The deal is expected to close in the quarter ending March 2024.
In June 2022, the company had to lay off 34 employees, or 14% of its total staff, across product and people operations roles. “This decision was ultimately made to ensure we’re able to move forward sustainably, especially in light of increased economic uncertainty, and continue to deliver on our vision for years to come,” Thomas had said in a statement back then.
