BlackBerry's $425 million acquisition of former unicorn' Good Technology demonstrates how start-up stories often "end in tears", according to one analyst.
The phone maker confirmed it will buy the smartphone security platform last Friday as it moves further away from device hardware to concentrate on providing secure software for mobile devices, which remains one of BlackBerry's strongest selling points.
Good Technology CEO Christy Wyatt called the acquisition "the next exciting chapter of our journey".
However, analyst group TechMarketView argued the news is a sign of how far Good Technology has fallen from a billion-dollar valuation received only two years ago, classing it as a unicorn' (a start-up valued at at least $1 billion).
Claiming most young tech firms are valued too highly, TechMarketView chairman Richard Holway said: "It can only end in tears. A good example of this was Good Technology (public financial data). It was once a unicorn as a result of some $291 million raised from private investors.
"But on Friday it was acquired by Blackberry for $425 million. Good Technology had revenues of $212 million but losses of $93 million and was burning cash. Someone must be nursing some interesting losses."
Good Technology had filed for an IPO in May last year, but losses had increased from $89 million in 2012 to $115 million in 2013, before dropping back to $84 million in 2014, according to a filing.
BlackBerry expects to complete the acquisition by the third financial quarter of next year, adding that the purchase could bring in $160 million within the first year.
