
Pivotal Buys Xtreme Labs for $65M in Cash - cpymchn
http://allthingsd.com/20131002/in-a-big-mobile-move-pivotal-buys-xtreme-labs-for-65-million-in-cash
======
chamakits
As a bit offtopic, I've never "heard" of Pivotal directly regarding the kind
of work that they do. But I recently started using Jasmine, and decided to
look into who is behind it, and I see Pivotal.

I think, "Oh cool. Let's see what else they do.", and man, they fund so many
open source projects that are considered "standard".

Just take a look:

[http://pivotallabs.com/tools/](http://pivotallabs.com/tools/)

[http://www.gopivotal.com/about-
pivotal/community](http://www.gopivotal.com/about-pivotal/community)

Happy to see a company push open source forward as much.

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mabbo
Whenever I see "... for $X in Cash" I really want to believe they rolled up
with a cardboard box full of money.

~~~
sanderjd
Interesting. Why a cardboard box? I picture a briefcase handcuffed to some
sort of emissary.

~~~
veemjeem
Unless it is a bank cheque, I don't think you can fit $65M in a briefcase. If
we use breaking bad as reference, we'd need 6 of those 55 gallon barrels to
transport $65M in cash, or a really really large cardboard box.

~~~
ballard
4 barrels at absolute minimum. 5 at a practical minimum, depending on how
tightly packed.

 _\- Volume: ~ 74 L (19.6 gal) -_

6.5e7 [$] * (0.06943 [in^3/bill] / 100 [$/bill]) = 45129.5 in^3 ~ 195.366
gallons or 739.54 L

195.366 [gal] / 55 [gal/barrel] = 3.5 [barrels]

Rule-of-thumb: 1.1 L (0.3 gal) / Mega$

 _\- Weight: ~ 650 kg (1433 lbs) -_

A $100 bill weighs exactly 1.00 gram, so $65M (MM) weighs 650 kg (1433 lbs).

The money in each barrel would weigh at most 183 kg (360 lbs), so a water
barrel will work since water would weigh about 45 kg (100 lbs) more.
Therefore, sealed money barrels float.

Rule-of-thumb: 10 kg (22 lbs) / Mega$

 _\- Other Hazards -_

Mold, insects (silverfish, etc), mudslides, ground-penetrating radar and
federal agents

~~~
sanderjd
Mold, insects (silverfish, etc), mudslides, ground-penetrating radar, federal
agents, and neo-nazis!

Thanks for the awesome analysis!

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programminggeek
So, does Xtreme Labs build custom mobile apps for enterprises? It is sort of
hard to cut through all the buzzword bingo in the article.

~~~
blisse
Xtreme Labs builds mobile apps. Our portfolio includes the Facebook, Twitter,
and MTV apps, to name a few. We are essentially a contractor, and work on all
mobile platforms - Android, iOS, WP8, BB, and Web are the main ones I think.

Source: I work for XL (now part of Pivotal and Pivotal Labs).

~~~
jordanthoms
Not sure having worked on the Facebook and Twitter apps is a selling point -
at least not the Android versions!

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cocoflunchy
Can I ask what it is that you don't like about the Facebook and Twitter apps?

~~~
jordanthoms
Oh, that is a long, long list, but I'll give a few things:

Facebook: UI doesn't fit with Android standards, and on top of that it sucks
too. An example of how to get it right on Android is the Google+ app. They
should really be using the standard action bar (or at least a better emulation
of it), and the standard navigation drawer. Facebook had an update for the
iOS7 visual standards on release, but they still haven't fully embraced the
Holo themes introduced 2 years ago on Android. In fact, the Android app's UI
is essentially just bad port of how their old iOS6 app looked.

Poor performance overall, this has gotten better as they've switched to a more
native UI, but it's still worse than it should be. Scrolling performance is
still a bit janky, even on the Nexus 4 - A few seconds with overdraw shown
gives plenty of things to fix.

The Image upload UI is pretty bad, especially that horrifically designed
notification.

Twitter has similar issues, mostly to do with using non-standard + bad UI.
They have a beta version now with a faked Navigation Drawer, but they got lots
of things wrong so feels really out of place (why they didn't use the standard
one is a mystery).

Overall, the FB + Twitter Android apps clearly get a lot less love than their
iOS apps. They have actually been getting better - the facebook app a few
years ago was far worse (e.g. couldn't see or add event comments, which is
pretty obviously important on mobile), but they still have a long way to go
before they match up to the quality of the Google apps on Android (some of
which I have problems with also, but that's a different issue!)

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adammichaelc
Writing is on the wall with mobile.

Here is a great presentation on the topic, Mobile is Eating the World.
[http://www.slideshare.net/bge20/2013-05-bea](http://www.slideshare.net/bge20/2013-05-bea)

Disclaimer: I'm biased. I work for [http://mokriya.com](http://mokriya.com)

~~~
ceekay
Nice portfolio!

~~~
adammichaelc
Thanks! We are having a blast working with such awesome folks.

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uladzislau
The majority of stake in Xtreme Labs was bought by Chamath Palihapitiya one
year ago for $20 million. [http://allthingsd.com/20120925/chamath-
palihapitiya-personal...](http://allthingsd.com/20120925/chamath-palihapitiya-
personally-buys-majority-stake-in-mobile-development-shop-xtreme-labs/)

Now it's being sold for $65 million. I'm wondering what made Xtreme Labs three
times as valuable in a year? And why Chamath sold it so quickly?

~~~
ChuckMcM
You made a common error there, Chamath put in $20 for a 'majority' stake,
which can be either 50.1% of the shares, or x% where X < 50.1 but represents
the largest single block of shares (I've seen both types of stakes being
called 'majority stakes')

Lets say it was 50.1% then the post money valuation of the company was $40M
(not $20M) so in that scenario the growth in value was 50% (rather than 300%)

That said, since these things don't go into details, he may have lost money on
the deal if the deal is structured more for retaining the talent than paying
back the investors.

~~~
001sky
This is a good point, and also its worth another note (from the linked
article):

 _Palihapitiya put $6 million into the company upfront, he said, and has
committed $20 million over the next three years._

The article goes on to note that this was a personal investment, not an
investment of his fund. So, all things considered, perhaps not so surprising
that he chose to exit opportunistically.

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rubyrescue
This is surprising. Consultancies are generally worth 1.25x their annual
revenue, or 5x their EBIDTA meaning they are doing 52mm in annual revenue or
13mm in EBIDTA. Perhaps the multiple is significantly higher for the client
book.

~~~
VladRussian2
hiring and onboarding 300 "hot" mobile developers (well more probably
something like 100 devs plus 100 PM/mgr/etc plus 100 GSA) - this way they paid
200K/head and have them from day 1. Add client book too.

