User-Generated Marketing Service Chute Acquired by Private Equity Firm ESW Capital

A few years ago, companies clamored for solutions to help them capitalize on free media, the content people were producing on social media and voicing their support or displeasure about a particular product or brand. Tools were created that would help marketing managers and customer service agents communicate back to these influencers and many have since gone on to exits, like Buddy Media (Salesforce), Wildfire Interactive (Google), Eloqua (Oracle), Livefyre (Adobe), and Olapic (Monotype). On Tuesday, user-generated marketing service Chute joined its peers in being acquired with the purchaser being private-equity firm ESW Capital.

Financial terms of the deal weren’t disclosed, but Chute’s technology will be a part of ESW’s Ignite Technologies business.

Founded by Ranvir Gujral, Greg Narain, and Gaurav Sharma in 2011, Chute helped companies tell more engaging narratives by leveraging what people posted on Twitter, Facebook, and Instagram. From photo walls, dynamic banners, e-commerce stores, ads, media rights tools, analytics, and eventually enterprise-level integrations with Salesforce, Chute developed tools it thought would become a platform that would help marketers finally make sense of the so-called “influencer”. But as competitors came and went, what was the exit strategy for Chute? An Instagram partner, the fact that the Facebook-owned photo service cribbed its API certainly did Chute no favors, along with countless other third-party developers.

Another stumbling block that the startup dealt with was the departure of Narain last year to start up a consultancy.

Chute raised $16 million in total funding, with its last round coming in 2017. At the time, Gujral demurred about an acquisition, telling me in an interview: “We have always focused on the enterprise, but we have a small sales and marketing team. By leveraging our integrations with the incumbent providers, we believe we have a more seamless and cost-effective path to addressing the enterprise.”

In its release, ESW Capital stated Chute’s marketing technology would become a fixture in its subsidiary Ignite Technologies, which already includes location-based data management tool Placeable, audience-based marketing optimization service ThinkVine, analytics tool FirstRain, and predictive lead scoring and profile management offering Infer.

“With the Chute solution, there are synergies to be achieved across the entire Ignite solutions customer base, but we see an immediate benefit for our Ignite Placeable Pages customers, as Chute can quickly add a new level of visual richness to a company’s website,” Ignite Technologies chief executive David Cushman remarked in a statement.

One might think this would be a happy deal for Chute, but when you look at its competitors that have been acquired for hundreds of millions of dollars and how it’s positioned in Ignite Technologies’ release, it seems less than stellar. Ultimately, Ignite Technologies appears to be building a digital marketing platform that could rival that of Adobe, Salesforce, or perhaps Oracle.

ESW Capital was founded in 1988 with a penchant for “buying, transforming, and running mature business software companies.” One could posit that the firm wanted to save Chute, integrate its technology into an area it felt useful, and that’s it. Other acquisitions it has made include Olive Software, ResponseTek, Mobilogy, Kayako, and Infer.

“We’re excited for the opportunity to enhance our core product solution as an Ignite Technologies company, as well as offer our customers expanded functionality provided by the entire Ignite Technologies suite of marketing tools,” Gujral said in a canned statement.

Investors in Chute included Y Combinator, Salesforce Ventures, Foundry Group, Freestyle Capital, Battery Ventures, U.S. Venture Partners, and several angel investors.