Just over two years after the Dec 2011 IPO of Jive Software (ticker: JIVE), the enterprise collaboration software company is reportedly exploring a sale to potential buyers ranging from Oracle, Workday and SAP. Jive and other enterprise social vendors are facing waning interest, and the latest data shows that venture capital funding to enterprise social software has also followed suite taking a nosedive.
Last April, we found that while enterprise social VC deals had ticked up after Jive’s IPO and Microsoft’s $1.2B acquisition of Yammer, funding activity was already on the decline. But with Jive now trading near historic lows and several firms in the space including BlueKiwi and SocialText already swallowed up or merged, it appears that venture financing activity and interest in the space has dampened substantially.
Enterprise Social Software Financing Trend
On a YoY basis, 2013 saw venture capital deals to enterprise social software companies fall over 70% while deal levels crumbled by 56%. As the chart below highlights, deal activity has dropped substantially since the eight-quarter funding and deal high in Q1’2012.
Enterprise Social Software Financing By Stage
While seed and Series A deals captured over 50% of deals in the space over the past two years, YoY deal levels to the enterprise social market have plunged across the entire maturity spectrum. Of note, mid-stage deal activity at the Series B and Series C stages has fallen over 70% and so early stage enterprise social companies are likely to find tough sledding ahead on the fundraising front.
Enterprise Social Software – Who Else is in Trouble?
Given Jive’s possible sale and declining financing and sentiment to the space, we identified 20 enterprise social companies that have not raised funding in over 18 months and that may be worth watching. Given declining sentiment to the industry, M&A groups, especially those keen on acqui-hires, may find the market particularly ripe for deals.
Together, the 20 companies have raised over $450M in aggregate funding and count Mobius Venture Capital, RBC Venture Partners and Acadia Woods among their respective investors.
The full list of venture capital-backed enterprise social startups can be found on the ‘Research’ tab, after logging on to CB Insights. (Note: This research is only available to paid subscribers with access to CB Insider.)