Wandera, a startup that offers enterprises a cloud-based solution to reduce the costs of mobile data through compression and better management, is announcing that it has closed $7 million in funding. The Series A round comes entirely from Bessemer Venture Partners, and is in addition to a seed round Wandera quietly raised last year from angels including Klaus Hommels and Alex Zubillaga. Wandera, which is based in London and San Francisco, is led by Eldar and Roy Tuvey, the two brothers who founded and then sold SaaS security player ScanSafe to Cisco for $183 million.
The ongoing growth of smartphone usage in the enterprise sector has seen an explosion in the use of mobile apps in the enterprise. Strategy Analytics says mobile business apps globally had revenues of $25 billion in 2012 and that 200 million people will be using them in 2013, with revenues rising to $50 billion by 2017.
That has led to the rise of a number of companies that want to help businesses better control the many costs associated with that. A lot of those solutions have focused on security on handsets (mobile device management) and policy control around certain apps (mobile application management). The recent, $200 million funding for AirWatch is a testament to how big that market is.
What Wandera offers is something different that it calls “mobile data optimization,” or MDO for short. This is an SaaS service, which is charged per user per month. Its software sits between a device and the wider Internet to apply compression techniques to reduce the amount of bandwidth for a particular application, giving enterprises access to the process, and information as well. Wandera claims that businesses can save an average of $100 a month on individual’s bill as a result.
The Wandera service, with its classic SaaS per-user, per-month charging format, can be used by smaller businesses of 10-25 users, through to the very largest companies. Some of the bigger names, and bigger enterprises, using the service today include IKEA, Shell and GE.
CEO Eldar Tuvey points out that Wandera is banking on the fact that currently 43% of an enterprise user’s mobile bill is related to data, with the projection is that this will continue to grow to 100% as more services move to mobile data networks — evidenced by the rise of voice apps like Skype and messaging services like WhatsApp taking users off legacy mobile voice and messaging services. Tuvey notes that mobile data use in the enterprise in particular has grown by 133% in the last year.
“The data element is the biggest part of your bill and arguably the most important part, so we think MDO the missing piece,” Tuvey points out to TechCrunch. “Wandera is unique in that it’s the first aimed at companies to deliver savings on that data through compression techniques.”
While companies like BlackBerry have actually offered products like this themselves, Wandera is also banking on the growing fragmentation in the market, and the gradual migration away from BlackBerry in the enterprise, to get more people using its service. “BlackBerry still has this feature for compressing data, but as the corporate world moves to different platforms and you begin to factor in tablets and 4G this will become a bigger issue,” he says.
The same technology, Tuvey points out, can also be used by enterprise data administrators to also look closer at which apps are getting used and (and which are not), to help shape app policies and data purchasing for the business in the future. “Up to now data has been effectively a black box for businesses. We’re giving them some itemization into that data with analysis and reporting,” he says.
The enterprise-as-target-customer is key here: there are a lot of data optimization companies out there already but much of that effort has focused on carrier networks and helping them better manage their wider data networks.
Tuvey notes that Wandera is talking to carriers, too, but for a different reason: they will likely resell Wandera’s service as part of their larger bid to offer enterprises more services to better manage their mobile workforces. Tuvey is not saying yet who its carrier partners might be but points out that among them are two tier-one carriers, with one in the UK and the other in the U.S.
For now, the plan is for Wandera to stay focused only on enterprises rather than expand to consumers. For that, they have a second venture, Snappli.