Microsoft acquires collaboration software startup Ally to bolster employee experience platform Viva

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Microsoft has acquired Ally, a 3-year-old Seattle-based startup that helps companies track and hit their goals. Terms of the deal were not disclosed.

Ally CEO Vetri Vellore. (Ally Photo)

Microsoft will use the deal to beef up Microsoft Viva, its new employee experience platform that launched earlier this year. Viva aims to improve wellbeing by analyzing how employees spend their time, provide a central hub for internal company resources, integrate learning into the flow of work, and provide better access to internal corporate knowledge and expertise.

Ally helps companies monitor their Objectives and Key Results (OKR), a popular framework for running teams and businesses. The idea is to bring together data from across an organization and keep employees on the same page as they work toward milestones. Customers include brands such as Dropbox, Zillow Group, Overstock.com and others.

Ally will power a new Microsoft Viva module, and Microsoft will integrate Ally into its other products such as Office, Power BI, and Teams.

“Ally.io and Microsoft Viva will enrich how people and teams come together to build alignment and achieve better business outcomes,” Kirk Koenigsbauer, Microsoft COO and CVP, Experiences and Devices Group, wrote in a blog post.

Viva is Microsoft’s entry into the increasingly crowded category of employee experience technology that aims to measure and improve the overall quality of work, health and life of a company’s employees.

It’s part of a larger effort by Microsoft to make its Teams a central hub for work, attempting to give its communication and collaboration software an edge over rivals such as Zoom, Slack and Google, while expanding its productivity technologies further beyond the core Microsoft Office suite.

Ally had raised $76 million, including a $50 million Series C round in February. Investors include Green Oaks Capital, Tiger Global, Madrona Venture Group, Accel, Addition Ventures, Founders’ Co-Op, and Vulcan Capital.

“As a part of Viva, we’re excited to continue shaping the future of work, now with the power of the most important technology company in the business sector behind us,” Ally CEO Vetri Vellore, who previously spent 14 years at Microsoft, said in a blog post.

Ally’s software integrates with other collaboration tools including Slack, Jira, Smartsheet, Asana, and more. Microsoft said today that “current customers can continue to expect the same great support and service, and new customers can continue to purchase the existing service through Ally.io.”

Vellore came up with the idea for Ally after an experience at his previous startup. In 2007, he co-founded Chronus, a company that built digital tools for employee development programs. He implemented OKRs but found it cumbersome to track progress with spreadsheets and other manual methods. So Vellore built his own tool to streamline the process, which is what eventually led him to start Ally.

Aviel Ginzburg, general partner at Founders’ Co-op, which led the company’s seed round, wrote in a blog post that “Vetri is a man on fire with the passion to impact and elevate others, delivered through a rare balance of charisma and humility that we look for in every new founder that we meet.”

“While we’ll miss spending time in the trenches with Ally.io’s fantastic leadership team in this next stage of their growth, Microsoft is and always was the perfect long term partner for them, and we couldn’t be more thrilled for everyone involved,” Ginzburg wrote.

Ally has more than 1,000 customers across 80-plus countries. It employs 250 people.

Ally won Startup of the Year honors at the 2020 GeekWire Awards, and was a finalist for Next Tech Titan this year.