Loom Raised Prices 10x. Here’s What Happened Next.
In 2023, Atlassian acquired Loom for $975 million. Everyone said it was a great outcome for the founders. Nobody said it was great news for the users. This approach to Loom alternative is worth understanding in detail.
Additionally, they were right to be quiet.
What Happened to Loom
Furthermore, the changes came gradually, then all at once.
First, the free tier got gutted: 25 videos max, 5-minute recording cap. Anyone who used Loom for casual bug reports, quick walkthroughs, or async team updates hit a wall almost immediately.
Then came the pricing restructure. Loom now charges $15/user/month for Business, $20/user/month for Business + AI. But the real kicker is the tiered pricing model, a team of 55 users doesn’t pay for 55 seats. They pay for the 100-user tier. That’s a big number for a tool you use to record quick demos.
Moreover, and then the Creator Lite role got discontinued. This was the feature that let teams add casual users at no cost, view-only contributors, occasional collaborators, people. Who needed to watch recordings but rarely made them. Those users are now being upgraded to paid seats.
However, for some teams, costs went from hundreds of dollars per year to tens of thousands.
Specifically, atlassian also lost over half its market cap between January and March 2026, laid off 1,600 employees. Has been burning goodwill at a pace that would concern most acquisition teams.
The two Loom co-founders left after the acquisition. One reportedly walked away from $60 million in unvested equity.
That’s not an acquisition success story. That’s a product warning sign.
The Users Who Left
Reddit has been tracking this in real-time.
Posts like “Can someone recommend a free or very cheap Loom alternative? I need to do a few short videos a month” are getting hundreds of upvotes and 80-comment threads. The pattern is consistent: users who relied on Loom for light-to-moderate async video communication are now actively shopping. For something else.
They’re not angry. They’re just done. When a tool that cost you nothing starts costing you $1,200 per user per year, the math doesn’t. Require much analysis.
What they’re finding on the other side is a fragmented market. OBS Studio if you want free and don’t mind complexity. Screencastify if you live in a browser. Camtasia if you want pro editing and a $300 license fee. Screen Studio if you’re on Mac and want something polished.
And a lot of new entrants, Cap (open source, solid), Tella (polished, good pricing), SmoothCapture, all racing to. Capture Loom’s displaced users while the window is open.
What This Tells You About Acquisition Economics
There’s a recurring pattern in software acquisitions that the industry keeps relearning.
When a company acquires a product beloved by a specific user segment, the acquiring company’s first instinct is. To monetize harder. The product was probably underpriced relative to the value it delivered, that’s often why it was beloved. The new owner sees margin opportunity. They raise prices.
What they often miss: the love was inseparable from the price. The product’s NPS wasn’t “this is an amazing video tool.” It was “I can’t believe this is free.” Remove the free tier. You remove the reason people tolerate the rough edges.
Loom was free (or very cheap) for a long time. That subsidized user patience for the occasional bug, the so-so editing tools, the cloud-only storage. At $20/user/month, users apply different standards.
This is the same story that played out with GitHub Actions pricing, Heroku’s free tier removal. A dozen other beloved developer tools post-acquisition. The users who leave don’t come back.
The Async Video Category Is Resetting
The good news, if you’re building in this space, is that the category is resetting right now.
Loom spent years as the default answer to “how do I send a quick async video?” That default. Is up for grabs. Millions of users are actively re-evaluating. The switching cost is low (no multi-year contract, no implementation overhead). The alternatives are maturing.
The tools that will capture this moment share a few traits: dead-simple recording flow, instant shareable link, no. Bloat, honest pricing. Not another enterprise screen recorder with 47 features and a sales-assisted onboarding.
Just: open app, record, share link, close app.
That’s what Loom was before Atlassian. That’s the product the market is looking for again.
The Loom story is one we’ll use as a case study in product acquisition economics for years. The lesson isn’t that Atlassian is bad at running products, it’s that the economics of beloved-but-cheap tools are. Genuinely hard to change without breaking what made them beloved.
The window to build the next Loom is open. It won’t be open forever.
See also: AI support tools.
For additional context, see OpenAI’s research on AI capabilities.