Enterprise software giant SAP is acquiring “digital adoption” platform provider WalkMe in an all-cash transaction worth $1.5 billion.
WalkMe’s Nasdaq closing price yesterday was $9.64, with SAP’s $14 offer representing a premium of 45%.
Founded out of Israel in 2011, WalkMe was initially designed to simplify website navigation by providing real-time, contextual on-screen guidance. Through the years, the company opened its main global HQ in San Francisco and bolstered its platform with more features, with a growing focus on both consumer and enterprise applications — for instance, to guide users through new features or to on-board new employees. This might include little balloon overlays, or even on-screen prompts to try and convert free users into paying customers. It’s all about automating a process that would otherwise be a resource-intensive endeavor with human help alone.
As part of its enterprise push, WalkMe also provides insights into end-user behavior, with a focus on providing extra support tools or information at points where a user is more likely to exit an application.
WalkMe had raised around $300 million ahead of 2021 IPO, but like many companies during the pandemic period, its valuation has plummeted in the intervening years, going from a peak of $2.8 billion in September 2021 to a little more than $600 million within a year — substantially below it last-known private valuation of around $2 billion. The company’s valuation has hovered at around the $800-$900 million mark this year, but off the back of strong earnings last month, its shares have risen 25% in the past two weeks.
Indeed, WalkMe reported a 4% year-on-year revenue increase at its Q1 earnings in May, and unveiled WalkMeX — a new AI-powered copilot that suggests “the best next step for any workflow, anywhere” using WalkMe’s existing contextual awareness smarts. SAP said it intends to integrate WalkMeX with its own Joule copilot, which it debuted last September.
Notably, the deal is designed to complement two other acquisitions SAP has made in the past few years — it acquired fellow German firm Signavio, a business process automation company, for $1.2 billion in 2021. And late last year, SAP procured another German company called LeanIX, which specializes in enterprise architecture management — basically helping companies modernize more quickly.
WalkMe fits into that pattern, insofar as it’s all about helping companies transform for the modern software era.
“Applications, processes, data, and people are the four key elements of a successful business transformation,” SAP CEO Christian Klein noted in a press release. “By acquiring WalkMe, we are doubling down on the support we provide our end users, helping them to quickly adopt new solutions and features to get the maximum value out of their IT investments.”
