Huddle, the enterprise software startup that was once considered the hot competition against Box and Dropbox, has quietly confirmed an effective sale to San Francisco private equity firm Turn/River.
According to a blog by Huddle CEO Morten Brøgger, Turn/River has become Huddle’s majority shareholder. He gave no further financial detail, and said the firm’s other investors – Dag Ventures, Eden Ventures, Hermes GPE, Icon Ventures, Matrix Partners and Zouk – remained minority shareholders.
The firm will continue trading, with a focus on growing its core enterprise collaboration business.
He wrote: “This announcement represents a new phase in our growth. We look forward to working hand in hand with the Turn/River team to further develop our products, grow our team, and expand the support that we provide to our customers.”
Business Insider first reported the deal with Turn/River last month after seeing a letter sent by Huddle to its shareholders. Huddle also published a blog post announcing the deal, then deleted it.
The letter showed the deal was effectively a sale, with a source pegging the value at around $89 million (£68 million).
The letter, sent in early August, said Turn/River would be acquiring the bulk of Huddle’s shares under what’s known as a “drag along” covenant. This essentially means a majority shareholder in a company can force minority shareholders to accept an acquisition.
It also stated that the only people to see a payout would be Huddle’s preferred shareholders, including former chairman Charles McGregor, Indian investor and former Cisco exec Subrah Iyar, and early VC investors. Ordinary shareholders, including employees, were to lose out, though Huddle said it would pay those shareholders $100 each (£77).
Huddle was once considered a serious rival to bigger competitors like Box and Dropbox with its enterprise collaboration software.
It is jointly headquartered in San Francisco and London and raised $89.2 million (£70 million) in venture funding – once at a reported valuation of $250 to $300 million (£192 million to £231 million).
But Box went public in 2015, and Dropbox is making noises about an IPO this year. Meanwhile, Huddle’s two founders left the company. And in April, the firm disclosed that it urgently needed to raise at least $5 million in equity or find a buyer.