SAP to acquire customer identity management startup Gigya

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Europe’s largest tech behemoth and enterprise software company SAP has announced its plans to acquire Israeli tech startup Gigya. The company plans to leverage Gigya’s expertise to further develop its own Hybris platform which offers solutions for customer engagement and commerce.

With this, the company will get closer to realizing its goal of becoming the first company to offer businesses a cloud-based platform to manage customer data and draw accurate conclusions from various sources of customer engagement.

A privately-held company, Gigya was founded by Roolie Elizereov, Eran Kutner and Eyal Magen in Tel Aviv. It has its headquarters in Mountain View, California but its R&D operations in Israel. It is a market leader in providing customer identity and access management solutions and allows enterprise clients to manage customer data more effectively across a variety of channels and touch points.

Gigya reportedly manages 1.3 billion customer identities for 700 of the world’s leading companies and enables them to leverage its platform to develop identity-driven relationships with their customers. The idea is to get in all those business relationships under the SAP umbrella and then to integrate the required features into their wider e-commerce operations to offer even better service to its customers, and in turn, help sell more e-commerce solutions.

The details pertaining to the deal itself haven’t yet been made public yet, but USD 350 million is what is doing the rounds. This figure had already been leaked in the Israeli press the day before. Analytics firm Zirra also stated Gigya’s last private valuation to be two hundred and fifty million USD at its last financing round, wherein it had raised a total of thirty five million USD from a consortium led by Intel Capital.

SAP’s Hybris Profile platform will receive a significant amount of enhancement in its business logic expertise which will, in turn, help SAP to gain a leadership position in its emerging customer identity and access management market. For those of you not in the know, Gigya has already been a SAP Hybris partner since 2013 and the two companies have been jointly developing solutions ever since.

Gigya initially had started out as a social log-in platform in which it helped out online properties in managing customer profiles which are linked to their profiles on sites such as Facebook. Some years ago, the firm started widening its scope to feature in a broader set of added features that would manage customers for other e-commerce websites and otherwise.

As per Patrick Salyer, CEO of Gigya, the sector is witnessing a wide variety of transformation. Third party identities earlier used to be just social logins, but now, the very definition of the identity is being changed to include payment, security and even hardware. This new playing field has newer players such as Amazon and PayPal apart from Facebook that are big revenue churners.

This new direction that the industry is moving in has been a smart move, with online security becoming a paramount concern due to quite a few data security breaches (Equifax being the latest). Cloud being the latest storage buzzword and the growing concern of malicious hackers has been at the receiving end of these attacks.

Gigya too has fallen prey to such attacks in the past. The firm’s platform was used as a backdoor by the Syrian Electronic Army back in the year 2014 to gain access into various Israeli websites.

Gigya has over 300 employees who are all to be absorbed by SAP as part of the deal. The deal is likely to be finalized by Q4 2017.