Facebook Inc., which is ramping up its mobile business, has agreed to buy startup Parse, startup with a cloud-based platform of scalable cross-platform services and tools for developers, in a cash-and-stock deal valued at about $85 million, according to people familiar with the matter.
Parse is seen as an obvious choice for Facebook since it doesn’t own its own mobile OS like Apple or Google and neither does it make its own devices.
Instead, it’s a horizontal social and identity layer that runs through thousands of apps of iOS and Android, in deep custom integrations in devices made by hardware makers like HTC, and in its latest project, Facebook Home.
Through the Parse deal, the company will be able to offer back-end services for data storage, notifications and user management. This is a brand new kind of revenue stream for Facebook, as the company is keeping Parse’s freemium revenue model.
Parse, a startup founded in 2011 by a small group of seasoned Googlers and Y Combinator alums who got together to build a useful set of back-end tools for mobile developers has raised $7 million from investors like Ignition Partners. recent months, Parse had been raising a financing round that would have valued it at north of $50 million.
Parse currently has over 60,000 apps and roughly the same number of developers. Parse has a freemium model with a basic free version for up to 1 million requests or pushes per month and a limit of 20 bursts per second. A lowest paid version is $199 a month with 15 million requests a month, 5 million pushes per month and a burst limit of 40 per second. Then there’s an enterprise version where the rates are negotiable. They focus on monetizing the top 10 percent of their clientele. The company says apps won’t be affected in any way, that developers won’t have to integrate Facebook and that existing contracts will be honored.
Facebook won the deal through a competitive process. Other companies interested in the sale included Dropbox Inc., Google Inc., and Yahoo Inc.
Doug Purdy, Facebook’s director of developer relations, explained in a blog post on Thursday that Facebook has no plans to alter Parse’s products, which was reiterated by the Parse team in a separate announcement.
By making Parse a part of Facebook Platform, we want to enable developers to rapidly build apps that span mobile platforms and devices. Parse makes this possible by allowing developers to work with native objects that provide backend services for data storage, notifications, user management, and more. This removes the need to manage servers and a complex infrastructure, so you can simply focus on building great user experiences.