Facebook has just completed its latest move to acquire Kustomer Inc.
Kustomer, which is a New York-based software company, helps businesses manage customer conversations and interactions across multiple platforms.
Facebook made the announcement about the acquisition on Monday via a post on its official blog.
Although, details of the deal was not made public, sources close to the proceeding said the acquisition of Kustomer was valued at a little over $1 billion.
In the post made by the social media giant on Monday, the company explained that its goal with Kustomer is to give businesses access to best-in-class tools that deliver excellent service and support.
“As businesses adjust to an evolving digital environment, they’re seeking solutions that place people at the center, especially when it comes to communication. Any business knows that when the phone rings, they need to answer it. Increasingly, texts and messages have become just as important as that phone call — and businesses need to adapt,” Facebook said.
Although, acquisition of businesses is not new to Facebook, the acquisition of Kustomer seems a little unusual.
In the past, Facebook has bought consumer-focused companies like gif catalog company Giphy, and Spanish cloud video gaming company, PlayGiga in December.
These acquisitions usually serve as the foundation for building features for Facebook users.
However, with Kustomer, Facebook will be providing small businesses that use its service to advertise and sell goods more features to close sales through the social network’s services.
According to CNBC’s analysis, this move is targeted at making businesses spend more time on Facebook, as well as spend money on advertisement on facebook.
It becomes clear why Facebook would invest such amount on acquiring a company like Kustomer, especially, as Facebook makes close to 100% of its revenue from advertisement.
Kustomer was co-founded by CEO Brad Birnbaum and Jeremy Suriel. Both co-founders have worked together across a range of places, including Airtime and AOL.
According to a report by TechCrunch, Kustomer is valued at $710 million, this is after the company has raised approximately $173.5 million private funding from investors.
In about 16 years of Facebook’s existence, the company has bought over a hundred companies and startups.
Two notable acquisitions by Facebook are Instagram, which the company bought in 2012 for $1 billion; and WhatsApp, which cost the company $19 billion in 2014.
