NewVoiceMedia, a UK-based provider of cloud-based contact solutions, is today announcing that it has raised another $50 million. The company will use the funding to build out its business in America and Asia in order to compete with the likes of Inside Sales, LiveOps, inContact, carriers, and a number of regional providers.
With a long list like that, you can see where big funding might come in handy, but Jonathan Gale, the CEO of the company, tells me that this was only part of the impetus for raising the money.
The other simply had to do with seizing the moment as it was spotted by investors as well as NVM itself. “We had no plans to raise more so soon,” he tells me in an interview, “but the contact centre world is starting to migrate aggressively to the cloud and with customers coming off Cisco and Avaya on-premise solutions, we were seeing that they’re not even considering on-premise or hybrid anymore.”
NVM is not disclosing its current valuation except to say that it’s ‘big’. From what I understand it’s in the region of hundreds of millions but not net breaking 10 figures. The company told me last year that it had licensing revenues of $10 million for the year. Gale says that the projection is that this will grow 103 percent this year.
To date, NVM, which was founded in 2000, has raised $105 million. Nearly all of that has come in the last year-and-a-half (including $20 million in January 2013 and $35 million in September 2013). This is another measure not just of current investor interest in the enterprise space, but of the need for those who are serious about leading in it needing to push ahead aggressively right now to grow.
“A number of investors were pursuing us,” Gale says. “We think there is a potential in growing faster and harder than you are already doing and to be more global in scale… I think that the market is quite reminiscent of the CRM market in 2001-2002 when it was aggressively transitioning to the cloud,” he adds.
The CRM comparison made by Gale is not by accident. This latest round, a Series E, was led by Technology Crossover Ventures, Bessemer Venture Partners, Highland Capital Partners Europe, Eden Ventures, Notion Capital, plus one strategic investor: the cloud-based CRM giant Salesforce.
Salesforce had actually been a part of a previous, undisclosed round as well as this latest funding injection. And when you think about it, this makes a lot of sense: NewVoiceMedia is among the army of startups that have been leveraging the rise of cloud-based services to disrupt the world of enterprise IT, and it’s fitting that among the backers of this latest round is one of the bigger businesses to have benefitted and driven that move to cloud services.
It also helps that NVM has integrated very closely and easily with Salesforce for a long time now, and Gale tells me that it’s one of the strongest sales channels that his company has.
To date, NewVoiceMedia has been seeing strong interest from two types of businesses: those that work in sales and those in services, which each account for roughly half of its business. Gale says its customers are typically of the 2,000-seat size, but in his past experience at MessageLabs (now a part of Symantec), he recognises a cycle in progress.
“I recall enterprise customers that started really sniffing hard around your solution two to three years before they bought,” he says. “And I’m finding that we’re having those conversations now at NewVoiceMedia with the 5,000-10,000-seat customers who may not buy this year but are starting to factor that into the cycle for the future.”
As for where the money will be invested beyond marketing and sales, Gale says he “wouldn’t rule out” acquisitions, although the company has already built a healthy business growing organically by investing a lot in its own R&D.
Where investment is likely to be made is to help continue building out NVM’s infrastructure. In the UK, the company has its own data centers but more recently, outside of the country it’s moved its whole platform to Amazon, and now has six nodes globally on AWS, from previously running everything out of the UK. “That’s allowed us to expand quickly,” Gale says. The projection is that in the next year the company will add between 35-50 percent of its bookings from outside the UK.
Although NVM has just pulled in a Series E, the company is not making any commitments on what might happen next. “I wouldn’t rule anything in or out on the subject of an IPO,” Gale says. “We’re well capitalized and have a lot of money in the bank we are investing in growth. We don’t have any immediate plans to do anything other than focus on growing the business, doubling down and continuing to build out the product and our IP.”
And although it already sits very closely with Salesforce as a product, and now the CRM giant is an investor, Gale cautions against assuming this, or one of its legacy competitors, could become another exit route. “There is a place for an independent market leader in this space,” he says. “In two to three years, there could be an IPO or further private funding. We’re not focused on that at the moment. We’re delighted the maker is moving the way that it is.”