The Acquisition Experience During a Downturn: Interview with Jeff Kupietzky, CEO of Jeeng

On January 26th, 2023, OpenWeb - the leading provider of community platform and moderation services - announced that it had acquired Jeeng, a startup which provides a platform for personalized, automated messaging to drive engagement and monetization for online publishers.

Maverick Ventures (Israel) has been an investor in Jeeng since its Series A round in April 2016, so we know what an interesting story lies behind both Jeeng’s success and the recent acquisition. We sat down with Jeff Kupietzky to get his experiences of what it was like successfully completing an acquisition during the current market climate.?

Congratulations on the acquisition! How are you feeling now that it’s all official and public?

Jeff: Grateful and proud! It’s been a long journey at Jeeng, with plenty of ups and downs, but my motto has always been that if you’re determined not to give up, and remain flexible, pragmatic and agile, you’ll get where you want to go. And here we are.

It’s also exciting for me that with a portion of the proceeds in OpenWeb equity - I feel invested in its success, and eager to see how the company evolves. It’s great to be still part of the story in that way.?

That is exciting - especially with a company that has become such a significant player in its field. Do you think it will go public?

Jeff: OpenWeb has created a fantastic story, platform and business. They have all the ingredients to be a public company so we’re excited for what the future will bring.

How did you know that OpenWeb was the right fit for Jeeng?

Jeff: It’s almost like a relationship. If you know your business inside and out, then when it’s the right fit, you know it.?

As you know, we’ve had significant interest from different companies and financial sponsors both in the past and very recently, in parallel to OpenWeb. There are so many factors you have to consider when an acquisition comes on the table. A lot of them go beyond the financial terms most people think about. For example:

• Will it take your products to where you want them to go? If it’s a good fit, an acquisition can be the best thing to accelerate the development of your products. If it’s not, it can sideline or kill them.
• Is it the right time for you as a company? In the past, in our case, I’d felt that we had too much unfinished business, that it wasn’t yet the right time to merge with a bigger organization.?
• Is it a good match for your employees? Will they fit smoothly into the existing organizational structure of the acquiring company, and is that company engaged in thinking about how that would work? Or, is there a risk their roles may be eliminated.

Did the current market conditions make a difference?

Jeff: In some ways, I think it might even have been a help. At times like this, it’s easier to see through the “noise” that’s usually present. The strength of a strong company is more obvious, it stands out from the crowd.?

That goes for companies looking to make acquisitions as well as companies being acquired; the companies looking to acquire are ones which are confident in their ability to continue to grow and succeed despite market conditions. And in our case, we were fortunate that our business has improved over the past year, making it more attractive.

I think all this leads to more clarity of vision on both sides. You know what you’re looking for, and why, and what you have to offer. It has to make sense for both companies involved, or it just isn’t being discussed now. There’s no interest in “nice to have” type acquisitions. It’s about need, and competitive edge, and it’s grounded in numbers.?

In our case, that played in our favor - as you know, our Series A (2016) investors are very happy with the return on their investment. My feeling is that companies that haven’t demonstrated compelling market fit and don’t have a unique selling point are better off investing in establishing both of those things now, even if it means making tough choices, rather than looking for acquisition. The market isn’t favorable for companies that are still finding themselves.

3 top pieces of advice for startups considering being acquired now?

Jeff:?

• Know your worth. You need to be confident in it, so that others will be too.?
• Focus on fit. In our case, OpenWeb was a match in terms of both vision and practical fit. OpenWeb is the leading provider of community platform and moderation services for comments on publisher sites to increase user engagement and reduce overall toxicity of user generated content. It just makes sense to add email capabilities to that context. For us, the acquisition increases our reach and impact in exactly the ways we were looking for at this stage.
• Take your time. It can be hard to do, because by nature it feels like a pressing and urgent decision, but you can press pause to consider without further conversations, and think about what you need to know, and make sure you’re making the right decision.?

3 top lessons from being CEO of Jeeng?

Jeff:?

• You need a founding technical team! There’s no substitute for technical expertise in the early days, and it only becomes more crucial as you get bigger. Founders with expertise in the industry they’re working in sometimes underestimate the importance of technical leadership. It’s a huge mistake. I can’t even imagine how we’d have overcome a hundred early challenges without a strong technical team.?
• Stay focused. I found this hard at the start of the Jeeng journey - we had 2 great ideas, but with limited resources, I had to choose between them. We ended up spending a lot of time and resources on the one we did not go forward with. It would have been better to choose right at the beginning, even though it felt impossible. I suspect a lot of founders are in this position at the moment. My advice - think of the long-term, be pragmatic, and choose so you can remain focused.
• Relationships matter even more than you think. Looking back at over a decade of a startup journey, I can see that the key decisions and key moments hinged on having the right relationships. That’s true both internally and externally - having a strong team built on trust and mutual respect makes the company possible, but we couldn't have succeeded at Jeeng without key relationships like the one with Maverick. And this includes being willing and active about following up on connections. For example, we first talked to Maverick before we had a product, it was just an idea, and we were told - go and build it. Prove it. Once we had a MVP, we went back, and the investment was ours. You can’t wait for things to come to you.?
• In my case, as you know, my relationship with Maverick Ventures (Israel) led to my becoming an investor in one of the funds - so you really never know where these things will lead!

What should startup founders know about their VCs?

Jeff: The relationship with your VCs is about so much more than money. A lot of founders are scared of their investors, they hold them at arm’s length - and it’s such a mistake.?

There’s so much your investors can give you, if you show you want it. It’s having people who aren’t afraid or embarrassed to give you a different perspective, or who will tell you when you’re about to make a mistake and suggest an alternative, or who are there for you when it’s 2am and you have an epiphany.

We were especially lucky to have Maverick Ventures (Israel) in our corner. I honestly don’t know what the early years, after the Series A, would have looked like without them. That personal care and commitment that Maverick has to its founders, the companies in its portfolio, and the people who work for the companies - it’s something else. And it makes a massive difference.