Mobile news app startup firm Circa seems to be in serious acquisition talks with a number of bidders which includes social media giant Twitter (TWTR, Financial) as per various industry sources. If the startup finally gets acquired by Twitter, it would mark one of the greatest acquisitions by Twitter and in the media industry where startups are gobbled by larger companies many a while. The news app, which streamlines news for iOS and Android users, was named the Best news app in 2013 but currently is in the state of distress since the failure of raising venture capital funding to the tune of $8 million. Though neither Circa’s nor Twitter’s management have approved such a move in public, media is presuming that private talks have already started between these two companies with the latter being in the acquisition mode.
Let’s quickly find out what Circa has been doing since its launch in 2011 and why it could prove to be a beneficial factor for promoting Twitter’s growth in user base in the upcoming quarters.
Circa on the move
Circa produces brief news stories for mobile devices and was founded by Matt Galligan. It has a long list of investors which includes Wordpress founder Matt Mullenweg and Path CEO David Morin. Since its launch it has raised a funding of around $6 million. The CEO was trying to fetch some new funding, but the venture failed because of the company’s heavy mobile focus as per Fortune.
Galligan told Business Insider, “We didn't put Circa up for sale. … We've got a term sheet for a Series A on the table, but after evaluating all the inbound interest for potential acquiring parties, we decided we wanted to give more attention to those conversations…”
In fact, if the acquisition of the media startup enters the final stage, it would be the latest media startup being consolidated this year. Interestingly, Circa comes in the list of media startups which have raised money in the past few years through venture capitalists but now are facing financial distress due to which are either running out of money or are being gobbled by larger companies.
Why would Twitter be interested in such a news app?
Recently the social networking site released its earnings report for the March quarter, wherein its financial numbers failed to meet the Street’s estimates. Therefore, it needs to improve upon its user growth down the line to improve both its top and bottom line in the next quarters. In fact, soon after the earnings call, Twitter has finalized a deal with Google on April 29 over the latter’s Double Click service. This would be a step towards increasing its user base, and the same could apply to Circa’s acquisition if it’s really in the cards.
Since Twitter currently does not produce any of its own content and actually helps publishers and media organizations to spread their content and links to followers, the acquisition of Circa does seem to be an unusual one for the company.
Parting thoughts
Though no clarity on such an acquisition has been provided yet from either management, Circa’s acquisition could be one of the probable acquisitions on Twitter’s mind for this fiscal year. But there is a lot which would need to be disclosed as on date, if this acquisition is really to take place in the pursuant months. So let’s stay tuned.
