Jive Software Nabs $30M in Round From Kleiner Perkins, Sequoia Capital
Jive Software, the Palo Alto, CA-based software company started in Portland, OR, has received $30 million in Series C financing led by Kleiner Perkins Caufield & Byers.
This latest shot of cash, part of which comes from Sequoia Capital, means the company has raised more than $57 million in the last three years. Sequoia had been Jive’s sole investor up until this point, providing $12 million back in October, and $15 million in 2007.
“This is the biggest joint investment that Kleiner and Sequoia have done since they partnered up with Google,” says Bryan LeBlanc, Jive’s chief financial officer.
The investors are betting big that Jive has figured out how to harness some key elements of social media for business. Jive provides social-networking, communication, collaboration, and social media monitoring tools to more than 5,000 businesses, a group that ranges from small and mid-size companies to huge global brands. Jive’s customer roster includes Nike, Starbucks, SAP, Cisco Systems, Charles Schwab, and Intel. The company also provides social networking and collaboration software for a number of U.S. government agencies, as well as congressional members and their staffs.
“We’re the largest and fastest-growing company in this new category,” says Christopher Lochhead, Jive’s chief strategy advisor. “It’s about a $5 billion dollar market growing at about 40 percent, and we’re the clear leaders.”
The company’s biggest competitors include Microsoft and IBM. But according to Lochhead, Jive has an advantage—the support of some significant VC dollars, which he says will give Jive the ability to expand its product offerings and hire the best talent Silicon Valley has to offer in “multiple gene pools.”
As part of the deal, Kleiner Perkins managing partner Ted Schlein will be joining the Jive board of directors. The $30 million capital will be used to “accelerate Jive’s rapid growth and further drive the company’s leadership in the social business market,” according to a company statement.
What does that mean for potential clients? That the company will be expanding on its current social business software—the “doppler weather radar” of what’s going on in specific markets as Lochhead puts it. It will also allow Jive to focus on developing four strategic pillars moving forward. First is what Lochhead calls ”Jive What Matters,” a one-stop command center that encompasses “everything that you need to get your job done,” in terms of monitoring deadlines, status updates, sales numbers, all in one place. Then there’s Jive mobile apps; social widgets, such as YouTube and SalesForce, integrated into the software; and seeking out more strategic partnerships with companies like Google and Twitter.
“What social business software entails is a new way to engage with your employees, customers and the web,” Lochhead says. “Why is it so fun, effective and easy to do all of this stuff in my personal life, and yet work sucks? All of those innovations in the consumer social web, Jive is bringing to the enterprise.” He adds: “It’s a new way to do business that allows people to work together, interact, in a way that just wasn’t possible before.”
LeBlanc, the finance chief, added: “$30 million allows us to have the currency to execute that strategy.”
Though Jive, founded in Portland, OR in 2001, relocated its headquarters to Palo Alto, CA last May, it continues to maintain a growing presence in the Pacific Northwest. The company laid off one-third of its employees—around 40 people, including the vice president of engineering and vice president of sales—after the economic down turn in 2008. But Lochhead says it’s maintained profitability and is growing again, with 270 employees spread throughout the offices in Palo Alto, Portland, OR, and Boulder, CO, as well as two outposts in Europe. In January, the company posted record profits—an 85 percent increase in full-year revenue in 2009 when compared to the previous year.
And although LeBlanc could not give us exact figures on how Jive is doing this year, he did say that the financial support from Kleiner Perkins and Sequoia is a strong indication of the company’s potential.
“We do intend to build a large, relevant software company, and often when you look at large, relevant software companies, they’re $1 billion companies,” LeBlanc said. “Having that capital now—I think it’s a testament that Sequoia has been very bullish about this space…it’s unusual and we feel, frankly, very honored to have two of the titans of Sand Hill Road both behind us.”