Google acquires BumpTop

Dateline: Mountain View, California

Exits are exciting, and particularly when they involve Google on the buyside.

Although no one involved will talk about it, it sounds as though the owners of BumpTop sold their baby to Google over the past two weeks. One is able to deduce this, in part, by the fact that Microsoft no longer carries BumpTop as a BizSpark partner. Something that had been the case up until a short time ago. According to Microsoft, Bump asked to withdraw a few days ago. Travelling to Silicon Valley is a great way to come across the skinny back home.

Second, BumpTop quietly announced to its users yesterday that life was taking a different turn.

Given the arm wrestling going on between Apple and Google over who will have the sweetest user experience, Bumptop’s cool desktop and underlying technology are a natural piece of Google’s user interface puzzle as they prepare to take on the current kings of all consumer electronics. The ones down the street in Cupertino.

As to price, we can assume that it wasn’t above US$63 million, since the acquirer didn’t make a public announcement as might have been required under the Hart-Scott-Rodino Act had it broken that threshold. My guess is that the number comes in around US$35/40 million. Given the type of company it is, and what has been discussed on the grapevine over the past year, if it safe to say that $2 million to $3 million has been invested to date. No more than that. Let’s guess the VCs got half the business for their capital. What’s the all mean, sports fans?

The folks at Extreme Venture Partners, GrowthWorks and a Montreal-based angel (I think I have those right) appear to have achieved the magical “10 bagger” that defines success in the world of angel and venture capital investing.

You may recall that we wrote about BumpTop more than three years ago. Although I am generally wrong about most things, at least I was able to see the investment opportunity, if not the commercial application (see prior post “U of T BumpTop buzz” March 11-07):

If you know what BumpTop is, please let us know. One feels the burning need to finance it, even if there’s no obvious commercial need for whatever it is that they are trying to do.

I might have a career as a seed investor yet. Although it wasn’t clear at the time where the start-up fit into the UI universe, it sure got the attention of the folks in Silicon Valley.

For the “first fund” team involved (Extreme), this is a great example of the ability of Canadian seed stage venture capitalists to do their jobs exactly by the playbook. For Ontario’s GrowthWorks, it is just another reminder that good VC teams can pick ‘em, even if they work for a Labour-Sponsored Fund (see prior posts “The great LSIF myth” July 2-08 and “LSIF funds see another win as Microsoft acquires Opalis” Dec 27-09).

In Extreme’s case in particular, it also proves that their unique in-house incubator model can work. And BumpTop isn’t the first deal they’ve started and sold for a profit since things got rolling there a few short years ago.

It’s early days, of course, but a 10-bagger often defines a successful fund vintage, particularly when it’s not the only win in the portfolio. For all the protests that limited partners may make about putting their bucks into the Canadian venture capital asset class, I predict that greed may swamp fear once word gets out that XVP’s model is working as it should. If it were me, and you were investing my retirement savings or tax dollars (which many of you are), I’d take the leap of faith.

Congrats to everyone involved.

MRM