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Summary:

Pivotal Labs, one of the smartest Web teams, known for its pioneering work in agile development, is in talks to be acquired, we have learned. The news will come sometime later this month. And we are still trying to pin down the buyer’s name.

PivotalLabs

Developing storyPivotal Labs, one of the smartest Web consulting firms, known for its pioneering work in agile development, is in talks to be acquired, according to some of my sources. The San Francisco–based company held an all-hands meeting on Monday that lasted for hours, a source tells me. Pivotal is going to stay in its current Market Street offices. The buyer is said to be a large technology company, but I am still digging more details on the buyer. So stay tuned!

Joi Ito’s Digital Garage, a Japanese incubation and investment company, snapped up Pivotal Singapore, news I had heard independently from sources. In an instant message conversation with me, Ito confirmed that the company bought Pivotal Singapore, but his group is not buying Pivotal Labs SF. Interestingly, on March 7, 2012, Digital Garage acquired New Context, a company that also lists Ian McFarland as president. McFarland was VP of technology of Pivotal Labs.

Back in 2010 here is what we wrote about Pivotal:

Pivotal Labs is a name that comes up often in regards to web startups, but it’s sort of an enigma. The company’s San Francisco office is home to the hyped-up distributed social networking effort Diaspora; its work has been credited for shaping Twitter’s development culture; and its clients include Groupon, Gowalla and Best Buy’s “Remix” API project. But what exactly does Pivotal Labs do?

Pivotal’s services are different from an incubator’s: It’s a consultancy that brings technical teams into its space to grow them, train them and help them build their products. Rather than Pivotal investing in companies, the startups and enterprise clients pay Pivotal for the service.

Pivotal has actually been around for 20 years, but in the last few years, it has created a sort of focused training program for technology startups and projects within larger companies. Say you have an idea for a company and raise funding for it. You then come to Pivotal, which takes on any developers already working on your project and hires new ones to round out the team. Your technical folks come into the Pivotal office every day at 9:00 a.m., sit down at a desk with a “Pivot” from the company’s team, and work in tandem as pair programmers for the full day until 6:00 p.m. At the end of period of about 2–7 months, you have a trained agile development team for building products with Ruby on Rails, as well as lot of progress on your product.

A few more reasons you may have heard of Pivotal: Pivotal Tracker, which the company developed to help clients plan and execute projects, is a free agile development tool that has hundreds of thousands of users.

In recent years, Pivotal has become a favorite recruiting ground for fast-growing companies. Square, for example, was one of the more desired destinations of those leaving the company.

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  1. It’s pivotal Singapore that’s been sold off. not the whole thing.

  2. Taposh Dutta Roy Wednesday, March 14, 2012

    Hey Om,
    The business model of pivotlabs was very innovative and sort of a start-up incubator. Do let us know who bought them.
    Thanks for the post!!

    Taposh

  3. Pivotal Labs is no longer at its Market St office.

  4. http://www.pivotaltracker.com/pricing
    It was free for the first 3 years but has been a paid for product for a least a year, brilliant product and well worth the cost.
    Paul W

  5. Ken Berger ✈ Wednesday, March 14, 2012

    Hi Om,
    Sounds like either the title here should be amended, or more beef added to the story, right?

    1. rumor has it that you bought it kenny boy…

  6. BolderBoulder Thursday, March 15, 2012

    Their director of engineering for the Boulder office posted “we’re hiring” yesterday https://twitter.com/#!/barinek — that said, this New Context org sounds interesting! Ian McFarland and Eric Ries under one roof :)

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