Cloud collaboration startup Huddle is gearing up for a significant push, thanks to a $24 million round of funding that CEO Alastair Mitchell says will allow the business to “really go for it.”
The London-based company, which provides a range of online collaboration tools and services, announced on Thursday that it had closed a series C round from investors including Jafco, DAG, Matrix and Eden. In addition, Subrah Iyar, the founder of WebEx, is participating in the round, along with Herb Madan (RouteScience).
The money will take the total the company has raised to $40 million, and comes ahead of what Mitchell told me was a concerted effort to expand with the demands of business customers.
“The headline stats are that our business has been tripling in size each year, and we’re expecting to more than triple this year,” he told me. “But the reason we’ve taken this funding now — because we didn’t need it — is because our enterprise customers, our big customers, grew fivefold last year and they’re on course to grow eightfold this year. Those are pretty extraordinary levels of growth.”
Huddle’s customer profile has altered over the last few years, moving from small businesses to a range of huge clients including both the U.K. and U.S. governments, as well as large corporations such as Diageo and HTC. That trend, said Mitchell, was now playing out in a serious way as top level executives started to invest in cloud services for their companies.
“Up until two or three years ago, the cloud has been growing with pockets of use and early adopters,” he said. “In the last 6 months, the CIO community has suddenly woken up and said that cloud, collaboration and content are three of the biggest problems they need to solve. We’ve now got to the point where, for example, we took a call the other day from an organization that said ‘we’ve got 2,000 users — can we scale up to 85,000?’”
Huddle already expanded its offering for large companies earlier this year, but it has also been expanding its product line with efforts like Huddle Sync, which not only allows users to carry and edit files across all sorts of hardware platforms and devices — but also knows what documents you should be working on before you do.
It plans to use the money to expand, particular in the U.S., where the company has just opened up a new office in New York. While the round is large for a series C, it is substantially less than one of its main rivals, Box.com, which pulled in a blockbuster $81 million round last winter. And then, of course, there’s always Microsoft’s SharePoint, which has a dominant role in this sector.
“The content collaboration space is about $25 billion in annual turnover,” said Mitchell. “But if you added up all of the social guys, all of the cloud storage guys, that probably comes to 5 percent of the market in their current form. Ninety five percent of the market is in the big, old boys — so we’re going for the 95 percent. SharePoint accounts for $10 billion of the $25 billion, nearly half of the market.”