Tech companies continue to pursue M&A and consolidation in a tight market. Startups, larger tech companies, and their partners are affected by this trend.
HappyFunCorp, a product engineering firm that builds apps for Apple, Disney, Amazon, and Twitter, is being acquired by Canadian firm Tiny for $30 million.
Tiny is publicly traded in Canada with a $500 million market cap. Ben Schippers, co-founder and co-CEO of HappyFunCorp, said in an interview that the company will remain in Brooklyn, New York, and be acquired with shares and cash.
It will also collaborate with Tiny, which has quietly acquired companies that provide a variety of front- and back-end design and product services for tech and internet companies.
WeCommerce, Dribbble, and Flow are Tiny’s other acquisitions. Andrew Wilkinson co-founded Tiny and MetaLab, an interface design company.
Together with HappyFunCorp, the companies work behind the scenes with some of tech’s biggest names—companies that do a lot of major work in house but also—maybe with a little less fanfare—turn to third parties to build out products that are typically outside of an organization’s workflow and thus a distraction and strain if developed, maintained, and updated internally, at least while they’re getting off the ground.
The combined Tiny organization builds apps and other work for Amazon, Facebook/Meta, Twitter, Disney, Samsung, Apple, and tens of thousands of smaller online businesses.
Some of the most successful projects span both ends. I remember MetaLab turning a struggling startup’s rough concept into Slack, an app that blew up beyond anyone’s wildest predictions.
Since 2009, HappyFunCorp has amassed a long list of high-profile clients. It’s bootstrapped and profitable like Tiny’s other companies. Schippers said revenues were $12 million in 2022 and will grow this year. He, co-CEO Holly Zappa, and COO Robb Chen-Ware will run the company after the acquisition.
This acquisition spins out TezLab, a popular third-party Tesla app incubated at HappyFunCorp, as an independent company.
Tiny’s acquisition of HappyFunCorp highlights a group of tech companies that are likely to play a larger role in the future.
Companies have laid off hundreds of thousands of workers in the past year and cut budgets to match the market. New technologies like AI create many unknowns in both departments.
However, those companies still want to develop new products and concepts to meet demand and create new demand for future growth. Tiny hopes this pull and push will attract more business.
Schippers said this type of company has changed over the past decade.
“Eight, nine years ago we did all this work and we didn’t talk about it,” he said of its high-profile projects, including Twitter’s ambitious ones. “The pendulum swings.”
Cost consolidation will also push many companies to a “near shore” R&D model in countries like Costa Rica and Latin America, “where work can be done at a fraction of the cost,” he said. “That’s the market.”