Several people have commented on the speculative nature of my earlier article on the TokBox acquisition being a semi-fire sale. I want to give our readers a more thorough explanation for my statements.
When a company is acquired for more than $20-30M, typically the price is leaked, since the acquiring company usually has to report to its shareholders, making it difficult to hide the price. This is why we see all these big acquisitions priced in Tech Crunch, etc.
Video conferencing companies either get acquired for a lot of money (Skype, LifeSize, Qik, etc), or they get acquired for their engineers. A middle-of-the-road acquisition price is rare in our field. Also, when you search for “opentok alternative” VSee is the first hit – meaning we get a lot of customers from TokBox. Looking at our former TokBox customer’s data, and previous acquisitions in our field, I would estimate the TokBox acquisition be $20-30M. Since TokBox raised $33M, the price may be closer to $33M so that investors won’t lose any money.
Since investors always get their money back before sharing it with employees, it follows that TokBox people would not have much left. This is why I say it’s a sad day for the TokBox team. That’s four years (Tokbox was founded in 2008) of their blood, sweat, and tears down the drain!
I should add that I am sure TokBox people got retention bonuses for staying, so they did get some benefits from the acquisition. But big telecomm’s don’t pay the same kind of high packages that Silicon Valley startups do. So here are my predictions: TokBox’s CEO will leave in 12 months (the usual lock in period), and half of the VP/directors will leave within 6-12 months.
Btw, I’ve always liked the TokBox team, and I personally know many of them :) They are super smart and hard working. (You may even see some joining VSee shortly :))
I’ve always thought that OpenTok had a lot of potential – there’s a huge market void for simple video API. (This is why VSee has a simple, rich API that allows anyone to integrate VSee into her website or social network in just a few hours. Here’s our IBM Connections [IBM enterprise social network] integrated with VSee: VSee has single sign on, seamless no-admin download, one-click calling.)
OpenTok should have been aiming for Skype-level of success. If I were the TokBox (OpenTok) CEO, I would not have sold. Instead, I would have dropped the core reason for poor video performance many months ago and bet that good video + simple API would win the market.
In summary, now that TokBox is acquired: Would OpenTok have had millions of users – YES. Are OpenTok people millionaires now – NO.