[SAN FRANCISCO] Microsoft Inc has agreed to buy UK startup SwiftKey, the application company best known for its free software that replaces the default keyboard on phones and tablets manufactured by Apple Inc and Alphabet Inc.
The FT reports the deal was agreed for about US$250 million, citing people familiar with the matter. SwiftKey is one of the most popular alternative keyboards on the iOS and Android mobile platforms, installed about 300 million times across both. It uses machine-learning to predict the ends of sentences as a user types, and after initially charging a small fee for downloads is presently monetized through in-app payments for features such as different colored themes to suit customer tastes. Crucially perhaps for Microsoft, it does not currently support the Redmond, Washington-based company's Windows Phone or Windows 10 platforms.
"It was clear to us when we met them back in 2010, that they had found an opportunity to build an incredibly exciting and global business that could scale quickly," said Alex Macpherson, head of London-based Octopus Ventures, which previously backed SwiftKey along with Accel Partners and Index Ventures. "The news that SwiftKey is to join the Microsoft family is a tremendous achievement for this innovative young business and further highlights the U.K. as a thriving global hub for entrepreneurship."
The market for third-party keyboards became more attractive to software makers since Apple first allowed such products to be installed directly into its iOS mobile operating system in 2014. Prior to this, developers were not allowed to replace the default keyboard on the iPhone or iPad. Alphabet's Android, the most popular smartphone platform in the world, permitted this as far back as 2010, paving the way for apps like SwiftKey and competitor Swype, which uses gestures and swipes rather than taps to input text, developed by Nuance Communications.
SwiftKey is developed by TouchType Ltd, a company founded in 2008 by Jonathan Reynolds, who serves as chief executive officer, as well as Den Medlock, chief technology officer, who holds a Ph.D in natural language and information processing from the University of Cambridge, according to his LinkedIn profile.