More rising fortunes for enterprise startups focused on cloud services. Huddle, the enterprise cloud collaboration company that competes with the likes of Microsoft’s Office 365, is today announcing that it has raised another $51 million in funding — a Series D round that will be used to double down on growing its business in the U.S. and Europe.
Specifically, co-founder and EVP of strategy Andy McLoughlin said in an interview that Huddle plans to hone in on sectors like government that have been some of the most successful for the company, building more features that cater to them.
This latest round — which brings the total raised by Huddle to just over $83 million — was made at a valuation of between $250 million and $300 million, a source close to the deal tells us.
The funding comes at an interesting time for Huddle. The company is not yet profitable — preferring instead to focus its returns on growing the business — but it has nevertheless become something of a coveted commodity, with companies like Mircosoft and Dropbox both making acquisition overtures in recent times.
“One of the reasons we’re raising is so that we don’t need to worry about getting acquired,” McLoughlin says.
The valuation, the funding and possible M&A moves speak to how the clouds continue to clear for cloud-based enterprise startups. Earlier this year, Box — another competitor to Huddle — filed for and then stalled on an IPO; but just yesterday it updated its S-1 with improving revenue figures. Another cloud company, New Relic, is expected to list soon, too.
This Series D was led by Zouk Capital — which has mainly concentrated on cleantech investments but has started to get more active in tech, with a stake also in iZettle. There was also participation from the Hermes GPE Environmental Innovation Fun; and Huddle’s previous investors Matrix Partners, Jafco Ventures, DAG Ventures, and Eden Ventures. As part of this round, Nathan Medlock, the Partner at Zouk Capital who led the deal, will join the Huddle board.
The reason for Huddle’s success appears to be two-fold: platform and customer base.
On the first of these, Huddle was one of the early movers in developing a platform where companies can not only share and exchange files with one another, but also work on them together, with versioning control and other ways of tracking changes built into the platform.
Secure services on the platform include Team collaboration, file sharing, task management, social collaboration and mobile collaboration, integrating with a number of third party apps and supporting multiple other platforms including Office, SharePoint, and SalesForce.
Of course, the threat for Huddle is that this is not as unique as it used to be. Companies like Box, Dropbox, Microsoft and many others are gradually adding in more of these collaboration tools, transforming themselves from simple storage into more intelligent data exchange (even if that is also why you can see why Huddle would be an acquisition target).
Indeed, this wider shift is something noted by Huddle itself when describing its would-be and current customers.
“We’ve seen the content collaboration market come of age over the last year, with enterprises and governments now replacing legacy software at scale and embracing this new way of working,” Alastair Mitchell, CEO, Huddle, said in a statement. “There has also been an increasing trend away from simple cloud storage. It has become a low-value commodity and simply replicates the age-old problem of content getting lost and siloed on shared drives with a new one – content now just gets forgotten about in the cloud.”
And yet, it is that set of demands that has contributed to the other reason why Huddle is attractive: it has built up a sizeable and impressive customer base. Among its clients in the government sector are four U.S. federal agencies and 80% of central UK government departments as well as NASA, the Office of the Secretary of Defense, Government of Greenland, the NHS, multiple local governments.
In addition to that, Huddle has also picked up a number of large enterprises, including Grant Thornton, Baker Tilly International, National Grid, P&G, Keolis, Williams Lea, Driscoll’s and Panasonic Europe. In all there are over 100,000 large businesses using Huddle.
Like any serious cloud business, Huddle has been bullish on leveraging the rising usage of smartphones and tablets, and it has popular iOS and Android apps for accessing services on its platform. However, that has yet to extend to a Windows app, something that may also be developed in the very near future, McLoughlin says.
“Demand for Windows hasn’t been there so far,” he says. “Among our customers, to date they haven’t been too bothered with Windows tablets.”