In an effort to add more functionality to its small business platform, Intuit, will acquire Lettuce, a cloud based solution that helps manage inventory and order flow. This step outside of payment and financial services into business services may send signal about how they plan to compete in the SMB space.
With more and more businesses popping up in the cloud, some companies have become ready to consolidate. Intuit, in an attempt to position itself as the go-to place for SMBs in the cloud, bought Lettuce.
With a price tag of $30 million, Intuit now has a cloud platform for companies to manage orders and inventory online. The company was founded in 2012 and caters to small businesses with a wide portfolio of cloud-based apps that feed into theirinventory and order management process. Lettuce was designed to get rid of repetitive data entry that is often the byproduct of multiple, unintegrated apps.
This is Intuit's 17th acquisition and unlike some acquisitions, where the buyer shuts down the company in order to redeploy the people in it, Lettuce will continue to operate as a standalone business. Lettuce is already integrated into Intuit's Quickbooks.
"We are so excited to join Intuit and take our product to the next level. With Intuit's reach, we will now be able to help millions of SMBs solve the same problems we felt when we originally designed Lettuce for our previous inventory-based dog toy company," said CEO and founder Raad Mobrem. "Lettuce is all about solving a huge inventory and order management void with incredibly simple and well designed cloud software. And the need was definitely there."
By the time that Lettuce raised a $2.1 million funding round in 2012, the company had already processed about $2 million in orders. Now the company is seeing 30-40% growth month over month.
The company has a three tier subscription pricing structure starting at $39/month and going up to $179/month.
Mobrem explains the sale, saying "while this is a big step for Lettuce, it doesn't mean that much will change," he writes. "Since the beginning, we've worked hard to improve the way you manage your orders and inventory so you can eliminate time-consuming, tedious tasks and spend more time doing the things you love. We plan on continuing down this path and once the transaction is closed, with Intuit's support, we plan to accelerate this tremendously."
One question that many investors and innovators in the cloud are asking after this sale is if this area will see consolidation or whether standalone businesses can survive?
Mobrem says that he believes that there will be a lot of smaller companies connecting with each other and growing into larger, more substantial companies. This trend has been seen, he says, with Box and Huddle who use APIs and create webs of multivendor services.