Huddle claims new ownership means "business as usual" for public sector customers

UK cloud collaboration firm Huddle confirms Turn/River as new majority shareholder, and claims the tie-up will help accelerate its growth into new markets. But what of its existing customers?

Public sector-focused cloud collaboration platform Huddle has moved to assure customers there will be no change to service or pricing now it is majority-owned by US venture capital firm Turn/River.

The change in ownership was confirmed in a blog post, authored by Huddle CEO Morten Brøgger, with the company setting out plans to draw on Turn/River’s involvement to help accelerate its growth in new markets as well as existing ones.

“I believe our combined expertise will enable us to grow even faster in our core UK and US government, and professional services markets, as well as initiating growth in new industries, with many new and exciting use cases,” he said.  

In a follow-up statement to Computer Weekly, Tim Deluca-Smith, vice president of marketing at Huddle, said the change in ownership will have little impact on the its public sector customers' day-to-day dealings with the firm.

"The Turn/River deal will have no impact on our public sector customers. The senior management team remains the same, we still operate as Huddle, and we will still operate as a UK company. There is no change in our product, pricing, service delivery, or commitment to our clients," he said.

Curiously, the Brøgger post, dated 21 August 2017, received little in the way of a marketing push by Huddle at the time of its release, with none of the firm’s social media channels or its UK PR team opting to share it.

The wording of it is near-identical to another post the company published and swiftly deleted in early August, announcing Turn/River as its majority shareholder.

No official explanation was given as to why the original post was pulled, but some past and present Huddle employees privately suggested to Computer Weekly the move may be down to some kind of behind-the-scenes shareholder revolt.

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As reported by Computer Weekly at the time, ordinary shareholders – including past and present Huddle employees – were informed via a letter on 7 August that the deal would put them in line to receive a $100 “goodwill” payout, despite many of them forfeiting higher salaries while working for the firm in exchange for stock options.

Computer Weekly first uncovered details that all may not be well financially at Huddle in April 2017, when a Companies House filing revealed the firm had until the end of the month to secure $5m in funding if it stood any chance of meeting its financial obligations for the next 12 months.

Despite being hailed as a UK tech startup success story, having secured a series of high-profile public sector contracts courtesy of the government’s G-Cloud framework, the company has never turned a profit and has seen its losses widen in recent years.

Speaking to Computer Weekly in August 2017, various industry watchers cited the company’s overambitious expansion plans, which saw it pursue overseas expansion and growth in other non-government verticals, may have led to it overstretching itself financially.

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