Intuit is plunking down $423.5 million for software firm Demandforce, in a bid to build out its services for small-and medium-sized businesses. The deal, which is expected to close in May, provides Intuit with an automated marketing and customer communications offering that complements its existing business and financial software.
Demandforce is a software-as-a-service web application that works within a company’s existing business system and provides tools for communicating with customers. It also helps small businesses market over the Internet and through mobile devices and improve their reputation. The San Francisco company has 35,000 small business users in North American and has helped its clients generate $1 billion in incremental revenue.
Intuit will run Demandforce as a new division in Intuit’s Small Business Group led by Rick Berry, Demandforce’s president and founder. It should help Intuit continue to grow its SaaS business and appeal even more to SMBs. There’s a big opportunity in helping small businesses grow up and take advantage of online tools. And it puts Intuit into a better position as it goes after some of the local marketing spend that businesses previously diverted to newspapers and mailers.
The all-cash deal is another win for Benchmark Capital, the largest institutional investor, which is coming off its big payoff in the $1 billion Instagram deal.