Meta Weighs Letting Go Of Cash-Burning Asset Kustomer Within One Year Of Acquisition

Meta Platforms, Inc META weighed strategic alternatives for customer service company Kustomer.
It looks to refocus on its core business, the Wall Street Journal reports citing familiar sources.
In February 2022, Meta completed its acquisition of Kustomer in a deal worth $1 billion.
Also Read: 3 ETFs May Bear The Brunt Of Meta’s Decisions, From Layoffs To Price Cuts
Kustomer builds software to manage customer messages from multiple services on one central dashboard.
Meta expected the acquisition to enable businesses to use its WhatsApp and Messenger apps for customer service.
Since the deal’s closing, Kustomer has burned through around $200 million between its operation and one-time expenses.
“In light of Meta’s efficiency efforts, we’ve decided to focus on our fastest-growing business messaging offerings, including the monetization opportunity for WhatsApp,” said Ryan Moore, a spokesman for Meta.
At one point, Meta contemplated selling the business outright before planning to keep a small stake in Kustomer.
In the planned divestiture, Kustomer’s valuation will likely be a small fraction of what Meta paid, reflecting the company’s recent financial performance.
Kustomer founders Brad Birnbaum and Jeremy Suriel have contacted venture firms to raise money to buy back the business and fund losses.
Since Kustomer’s acquisition, its compensation costs have far outstripped that of peer customer service companies.
Price Action: META shares traded higher by 1.08% at $181.44 in the premarket on the last check Monday.

Market News and Data brought to you by Benzinga APIs

Comments

Popular Channels

Tools & Features

Partners & Contributors

About Benzinga