Why did Adobe acquire Semrush?

Disclaimers. At the time of writing this article, the author still owns shares in Semrush. Nothing in this article is investment advice. The information below is my personal expert opinion based on experience and publicly available sources.

From my perspective, this deal is hitting several birds with one stone for Adobe.

1. Competitive Intelligence Tools.

Adobe has the Adobe Experience Cloud family. It includes Adobe Analytics. It is a very strong product in web and mobile analytics. From the user’s view, it focuses on analyzing your own website and app data.

Adobe was missing tools for competitive analytics and market research.

It is mission-critical now.

Because any business that grows online needs to benchmark against competitors to see real progress and learn where to copy strategies that work.

This is where Semrush fits well with Adobe.

From the acquisition target view, only two companies worldwide offer high-quality solutions in this niche.

It’s Similarweb and Semrush’s Traffic and Market toolset.

Since this layer was entirely missing for Adobe, the upsell potential inside the existing customer base is huge.

If marketed well, almost all Adobe Analytics users will want competitor research features.

It also makes me long on Similarweb. The potential buyer has no choice in this market anymore.

2. Google data access.

There are over a million Semrush users with free accounts, and more than 100,000 with paid accounts.

Users often connect their Google Analytics and Google Search Console accounts to Semrush to combine data from several sources. It’s hundreds of thousands of users who

This helps Semrush train its analytics models. It also helps users get more accurate data about their website performance.

This data is an incredibly sensitive sensor built into users’ websites. It aggregates traffic flow information from all possible sources, including ChatGPT and other LLMs.

There are only two companies in the world with that many connections to Google Data: Semrush and Ahrefs.

3. AI-driven search source tracking.

Traditional search is drifting toward an LLM-driven experience.

Share of Google search is declining.

But the total number of interactions across search engines and LLMs is growing.

People ask LLMs many more questions than they ever asked Google.

Tracking LLM results and brand mentions is not a big challenge from a tech view. Hundreds of companies offer this. Semrush also has strong tech here.

But it is not enough in the era of ChatGPT searches.

To see the full picture, you must see where LLM traffic goes and where LLMs take their knowledge from.

The second part is extremely expensive.

To collect data about LLM training sources consistently, you must scan the entire web on a regular basis. You want to see all changes on all websites in the content. This includes brand mentions and links between websites.

This requires enormous resources in web crawling, storage, and analytics.

Only two companies led this data collection worldwide. Semrush and Ahrefs. Moz is the third one with a wide gap in quality and discovery speed.

The infrastructure behind this tech costs Ahrefs $20 million per year as of 2023. The cost keeps rising because of the explosion of AI-generated content over the last two years. The current assumption is around $35M per year.

It is very hard to build from scratch, as tech, and impossible to match against the historic data that Semrush and Ahrefs own. Historic data is extremely valuable for reverse engineering the evolution of LLM training sources.

4. Good price.

As of the acquisition date, Semrush was trading at a historic low below $7 per share. It was clearly an undervalued price for a growing SaaS business with $400M in yearly revenue and more than $275M in cash on hand.

Their latest products, the enterprise solution and the LLM tracking toolkit, were growing at very healthy rates.

Entry-level customers were in decline, yet it did not matter much for Semrush. The company was openly shifting toward the enterprise market.

It also did not matter for Adobe, which is already focused on this segment.

So while a 70% premium to the market may seem high, the price actually seems pretty balanced for both Semrush and Adobe shareholders. It is almost flat from the year-opening and is well below its $18 peak in Q1 ’25.

5. FOMO

Some deals do not even need the logic above to be a no-brainer from the missed opportunities view. If HubSpot decides to enter the analytics space and takes Semrush off the table, any remaining player will need to buy at least two leaders in SEO and competitive intelligence. Ahrefs and Similarweb. Now, Adobe has secured its position in a growing niche. Potential Adobe competitors have few choices left except to go after the remaining players or invest years of time and hundreds of millions in developing the tech and data sources.

Product, data, upsells, market security.

To summarize, Adobe hit several birds with one stone. By acquiring Semrush, they made life harder for competitors, secured access to strong tech, data, and product, created real value for their users, and opened a huge upsell opportunity for their business.

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