UTest Raises its Largest Round Yet, $13 Million, to Scale Up Crowdsourced Software Testing Community

9/13/10Follow @wroush

UTest, which helps big companies crowdsource their software quality assurance (QA) testing to a community of 30,000 freelance testers, said today that it has raised $13 million in Series C financing. It’s one of the largest venture funding rounds ever collected by a crowdsourcing company, and from the size of the round, “you should take it as a validation that their business model is working,” say Sharon Wienbar, managing director at San Mateo, CA-based Scale Venture Partners, which led the round. “These guys have more business than they can handle, and it’s all about scaling now.”

The Southborough, MA-based company, which recently opened a Silicon Valley office, has built a software-as-a-service platform where companies submit their code and say what kind of testing they need, then wait for bug reports from uTest’s global community of testers. Wienbar and uTest CEO Doron Reuveni say demand for the service is exploding, in light of the growing number of companies that have software to test.

“The whole ‘appification’ of software platforms, whether it’s for social platforms like Facebook or mobile platforms like the iPhone or Android or Palm, or even just Web apps, creates a dramatically more complex user-testing matrix for software publishers, which could mean media companies, retailers, enterprise software companies,” says Wienbar. “Anybody who has to interact with consumers needs a service to help with that testing. You can’t cover that whole matrix with your in-house test team.”

UTest’s customers include big names like Google, Microsoft, Intuit, Myspace, and Thomson Reuters, and Reuveni says the startup’s revenues have grown by a factor of 40 over the past two years. But that could be just the beginning—outsourced software testing, after all, is a $10 billion market in the United States alone.

“We want to go faster, we want to go broader, we want to capture more market share, and we want to substantially increase our presence on the West Coast,” Reuveni says. “What we are trying to do is become the hub of all software quality testing worldwide. That is how big we want to take it—into all verticals and all horizontals.

Which takes cash. Reuveni says uTest—which previously raised $2.2 million in a March 2008 Series A round and $5 million in a Series B round just six months later—went to see five different Silicon Valley venture firms about the latest round. “The guys I liked the most were Scale, and we had a term sheet relatively quickly,” he says. Both of the company’s … Next Page »

Wade Roush is Chief Correspondent and Editor At Large at Xconomy. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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