AMSTERDAM/LONDON (Reuters) - Dutch start-up messaging company MessageBird has landed $60 million in first-round funding, the largest ever early-stage venture capital investment into a European software company.
MessageBird helps 15,000 organizations send messages or communicate with customers via chat, voice or video. Clients range from companies such as Uber, SAP and Heineken, to governments and semi-public organizations that use it for emergency messages and medical appointment notifications.
The Amsterdam-based firm competes in the fast-growing cloud-based messaging market with more than a dozen firms, including Twilio, Blackberry, Nexmo and Urban Airship.
The unusually large first round fundraising is due to the company having had almost no outside investment since it was founded in 2011, which forced it to be profitable from the start. It expects to generate revenue of $100 million in 2017.
“We have been growing about 100 percent a year for a couple of years now,” Robert Vis, MessageBird’s 33-year-old founder and chief executive, said in an interview. “We are always looking at how to sustain that”.
The so-called “Series A” funding round of $60 million was led by Accel Partners of Silicon Valley and joined by Atomico, a top European venture firm, along with seed stage investor Y-Combinator.
Messaging software makers face mounting competition including from broad-based cloud services providers such as Microsoft, Cisco, and Amazon, which earlier this year introduced its Connect embedded telephone services at prices one analyst estimated at about 40 percent lower than Twilio’s.
What sets MessageBird apart is that it has forged deals and built interfaces with 220 telecom carriers worldwide, making it the only similar platform running on telecoms carrier-grade infrastructure rather than over the internet. This allows it to speed delivery and guarantee quality of messages at lower costs.
“Until MessageBird, no one in the space had successfully built the relationships and technology at scale to directly (connect into) telecommunications carriers around the world,” said Atomico Partner Hiro Tamura, who will join the company’s board.
Its services can reach billions of mobile phones, it said.
MessageBird said it planned to use the funding to accelerate hiring and target new customers and small acquisitions in the United States, Europe and Asia.
With 75 employees, up from 25 in 2015, MessageBird generates more than $1 million in revenue per employee, “something of a magic number for us,” Vis said.
Vis said the funding would also raise its profile and bolster its balance sheet, both of which will reassure high-value potential customers such as banks of its staying power.
Despite having many of the business and financial metrics that have led rivals such as Twilio to stock market flotations, Vis said he has no intention to seek an IPO “for years to come.”
Reporting by Eric Auchard and Toby Sterling; Editing by Mark Potter