Intuit Acquires Marketing SaaS Company Demandforce For $423.5M In Cash

Intuit has just acquired marketing SaaS company Demandforce for $423.5 million in cash.

Demandforce’s SaaS application automates internet marketing and communications, so customers can focus on running their day-to-day operations. The startup, which is profitable, has thousands of customers across service verticals that include dental care, automotive repair, spas, salons, chiropractors, and others.

The SaaS designed to help customers to grow revenue, retain clients, maintain online reputation, and manage operations more effectively. Demandforce focuses primarily on small to medium sized businesses, offering email, mobile and social tools to help SMBs communicate with their customers and drive higher retention and growth in their businesses.

“Demandforce sits at the sweet spot of Intuit’s SMB customer base and is consistent with our goal to help our customers save time and make money,” said Kiran Patel, executive vice president and general manager, Intuit Small Business Group. “With a compelling customer value proposition, SaaS model and high growth profile, Demandforce will provide opportunities to grow Intuit’s customer base and revenue per customer over time.”

Demandforce was backed by Mike Maples, Palo Alto Ventures, and Benchmark Capital.

Becnhmark partner Bill Gurley wrote an interesting note about the acquisition today, revealing that the firm didn’t even announce Benchmark’s funding of the company, which he says is unprecedented. The Demandforce team always felt that the attention should be focused on the customer rather than the company. , he writes.

As with Instagram, Benchmark Capital is the largest institutional investor in Demandforce. Unlike Instagram, which is a consumer application and is extremely well known, Demandforce focuses on local professional businesses and has chosen to keep an intentionally low profile – a strategy that has served them well, Gurley explains.

Sp why did Intuit buy Demandforce? Intuit sees Demandforce as a way to boost its own SMB focused business. More than 60% of Intuit’s revenue is coming from online and mobile services, which is fueled by products like TurboTax online and GoPayment.

Once the transaction closes, Demandforce will become a division in Intuit’s Small Business Group.