Marco Boerries is CEO and founder of NumberFour – a startup that’s been operating in stealth for four years. Despite being under the radar, it landed a $38 million Series A, led by Index Ventures, back in June, one of the biggest Series A rounds in Europe in recent years. So how was a startup that’s not doing a lot of shouting about its product and potential able to bag such a big round. Speaking on stage here in Berlin, at Disrupt Europe, Boerries said it’s a measure of the size of the opportunity NumberFour is attacking.
NumberFour is building a platform that will provides productivity, communication, sales, production, procurement, delivery, reservation and financial tools for offline and online small businesses. The whole tech kit and kaboodle, as it were. It’s a massive market — some 200 million+ SMEs globally — and one Boerries argued is largely untapped.
“We have had over the last 30 years enterprise being completely computerised… But if you’re a small business — by which I mean one to 20 people — you don’t have really anyone to turn to. That’s why this market so far is, from our perspective, 80% open,” he said.
“Even if you look at companies like Intuit with QuickBooks… even though they’re by far the dominant leader in the U.S., the coverage of small businesses they have is around 20%. So the way I see it is around 80% of the world’s largest market untapped, and that’s what we’re trying to do. Helping them run their business.”
“This is probably the single biggest un-monetised, un-utilised technology opportunity existing today,” Boerries added. “When you think about this space, there are about a thousand companies that have tried to win the small business space. All of them have not really succeeded.”
As for why so stealthy, Boerries described it as a “daunting task” to create a product that works for small businesses of all stripes, across all device types — phone, tablet and the web — without any central IT support helpdesk to rely on.
“The problem we are trying to solve is quite a daunting task, that’s why it takes some time. And also I feel it doesn’t add very much value talking about stuff if you cannot show it to the customer,” he said. “What we’re trying to do at NumberFour is tackle a problem that’s been around for 40+ years: and it’s how do we help 200 million+ small businesses around the world use technology to run their business?”
When NumberFour does launch its product it won’t be called NumberFour — that name was chosen because it’s Boerries’ fourth startup. As for the product, he told TechCrunch’s MG Siegler, who was conducting the on stage interview, that he had it running on his phone — but wasn’t hinting at a launch time-frame.
“We have to pretty much reinvent every single thing… It’s phone, it’s tablet, it’s web, it’s pretty much across all the devices that you have. No matter where you are you’re going to be able to run your business. And that’s really, really important. When it comes to the phone I can literally run my business from this phone… The way that we architect our solution is there’s no certain functionality limited to a phone, or to a tablet or to the web.”
What about the investors? How has NumberFour been able to carry them along on tiptoes for four years? “Of course we had to convince our investors,” he said, discussing how NumberFour was able to raise such a large round while keeping its product under wraps. Turns out NumberFour did a convertible round ahead of this summer’s Series A. It also brought investors on board relatively early so they could see what it was building, and follow NumberFour on its journey.
“With some of those [investors] I’ve been working for the past three years,” said Boerries. “Basically in 2010 a few of them came and heard about my venture and said ‘ok we really would like to participate’. So we found a vehicle how they could start — getting under the kimono, so to speak — watch us. We didn’t announce it then at all but we did a convertible round.
“Then the interesting thing was that after when we decided ok now is time, as we’re moving closer, to put a value on it, not only did they agree with the value but everybody significantly increased their money. Because they were able to follow us for three years, so they could see the upside.”
Boerries has had three successful exits before this current startup, including selling his third company, Verdisoft, to Yahoo in early 2005. Doubtless that record has also helped convince NumberFour’s investors to take a longer view.