Intercom, a platform for companies to provide personalised customer responses online, is today announcing that it has raised another $23 million — funding that it will use to continue to develop its product, particularly in mobile, and expand its marketing to compete against bigger players like Oracle, SAP and Salesforce (the behemoth that even uses ‘CRM’ as its stock ticker on the NYSE).
The Series B round was led by Bessemer Venture Partners, and includes participation from previous investors Social+Capital Partnership. The company, which was originally incubated at 500 Startups, also counts the likes of Biz Stone and Huddle co-founder Andy McLoughlin as investors. This round brings the total raised by Intercom to $30 million.
Intercom is among a new wave of companies that are generally called “social CRM” providers. The idea here is that everyone in your organisation should be able to communicate his/her knowledge to customers when and if it is needed. The theory is that this means not only better engagement from your employees in the bigger team effort, but also more satisfying responses for users. It’s an area that larger players like Salesforce are moving on, with the launch of Salesforce One. Some have even hinted that Google could be a contender for social CRM solutions.
The evolution of CRM comes at a time of growth but also maturation of the internet: consumers expect better and more personalised responses, moving away from “super robotic” stock responses, in the words of Intercom’s co-founder and CEO Eoghan McCabe (who hails, along with the other three co-founders, from Dublin).
“CRM companies haven’t innovated in over ten years. Many of them are just ticketing systems. But what’s happening is that customer service is at the leading edge of great competitive online businesses,” he tells me. “In past, leadership was based on top engineering and good design. But today, the real leaders are those like Zappos people spend more there because they know they get to deal with a human.”
This also speaks to a wider trend we’re experiencing, where innovation is happening not at the core of prodcuts, but around how they are delivered. (You could argue that the same is happening in areas like mobile technology, too, where we are seeing more incremental rather than massive shifts at the moment.
Intercom’s approach to CRM involves a few different features. At its core, it’s a platform that receives messages from customers and then lets a company segment them so that they can be accessed by relevant people for responses (the segmentation can be by keywords, but can also be by things like length of membership, duration and date of last visit, and so on). When employees respond to customers, companies can create profiles so that the responses come from actual people rather than faceless general accounts.
The segmentation can also be used as the basis for reaching out to users as well around particular initiatives — one area that McCabe hints may get developed into more products in the future (indeed, you can see how email marketing might go hand in hand with CRM).
Since coming out of beta 18 months ago, Intercom has picked up 2,000 paying businesses, among them Heroku, Hootsuite, Yahoo!, Perfect Audience, Rackspace, and Visual.ly.
Ethan Kurzweil, a BVP partner that is now joining Intercom’s board, says that one of the things that caught his eye most about Intercom, and got him interested in investing, was the fact that several of BVP’s existing portfolio companies were raving about it. “We heard a range of good things about Intercom, and how excited employees were to interact using it,” he says.
That has even extended to customers figuring out ways of integrating Intercom into existing systems even when Intercom itself has not yet moved into figuring that out itself. Kurzweil refers to this as them hacking Intercom integration themselves.”
“One thing we look at when investing is when we see people going to special lengths to integrate something to make Intercom into a central tool,” he says. “You can’t undersell how unique it is when you’ve got your own customers building these hooks.”
As part of today’s news, Intercom is also announcing a new hire, Mark Woolway — a former PayPal and Yammer executive — as chief operating officer. It’s another major addition after poaching Facebook’s head of brand design, Paul Adams, as its VP of product in May last year.
Woolway had a notable role at Yammer helping it raise $142 million and then selling the company to Microsoft for $1.2 billion. At PayPal he had been VP of corporate development when it was still just a startup. He helped with the merger with x.com (Elon Musk’s company), raising money and exiting the company to eBay. He’s also worked as the MD of Peter Thiel’s hedge fund Clarium Capital at a time when it had some $8 billion in assets under management and was launching the Founders Fund. All of this points to some very serious ambitions for Intercom in the years ahead.
Ironically, up to now the company has built itself out with zero sales or marketing staff. “Jessica Halper is our first marketing hire,” McCabe tells me. “Our growth has simply been word of mouth.”