(Article previously incorrectly stated that this was Care's first acquisition since 2012)
The deal, which has already been completed, was worth up to a total of $48.6 million. $22.9 million of that was in cash and another $8.1 million was in equity. The agreement also allows for another $17.6 million in earn out payments, if Citrus Lane achieves certain unspecified "milestones."
Under the terms of the acquisition, Citrus Lane will become a subsidiary of Care.com, with Citrus Lane founder and CEO Mauria Finley becoming senior vice president and general manager of the company.
The Mountain View-based Citrus Lane is an e-commerce startup that sells monthly subscription boxes filled with products aimed at babies and kids, such as toys, books, snacks and household products. The company says that the products are "recommended and reviewed by real moms and are tailored to the age of your child, from newborn up to 5 years."
So why were these two companies a good fit?
Well, as Care.com CEO Sheila Marcelo pointed out, they both cater to a largely female audience, and moms in particular. But the connection goes deeper than that; the two companies share the same mission and values.
“Care.com’s mission is to be there for families, providing the best care solutions, services, advice and support," she said. "Citrus Lane is a natural extension of that mission, providing the best products for families with children, and creating a social community in which moms can share."
From the perspective of Citrus Lane, they get the additional benefit of Care.com's reach and resources.
“At Citrus Lane, we share the same passion for and commitment to helping families as Care.com does, which is why we couldn’t be more excited about joining Sheila and team," Finley said in a statement. "With the breadth and reach of Care.com, we’ll be able to connect with even more parents and children around the world.”
While still a relatively small company, Citrus Lane has been growing quickly in recent years, so it was probably wise for Care.com to grab it while it could. The company saw its revenue hit $6 million in 2013, a 300% jump from 2012. Its revenue is expected to double in 2014. Citrus Lane currently has more than 400,000 members, of which 45,000 are paying subscribers.
The company had raised a total of $6.6 million in funding, including a $5.1 million round in 2012. Investors in the company include GGV Capital and Greylok Partners.
Founded in 2006, Care.com raised $111 million in total funding, most recently a $50 million round from from IVP, Matrix Partners, New Enterprise Associates and Trinity Ventures in August 2012, before going public in January of this year.
In 2013, Care.com's revenue was $81.5 million, up 68% from $48.5 million in 2012. The company does not break out how much revenue it received from each specific stream.
Its total members also grew 46% to 9.7 million from 6.7 million in 2012. That number breaks down to 5.3 million families, of which 551,000 are paying members, and 4.5 caregivers, of which 88,000 pay. The company made $148,000 per paying family throughout the year, and $66,000 per paying caregiver.
While Citrus Lane and Care.com were obviously both excited about the deal, investors were less enthusiastic, sending Care.com's stock down $0.35, or 3.28%, in regular trading on Thursday to $10.33 a share.
(Image source: citruslane.com)