Yesware Says Yes to $13M VC Funding, No to Tech Bubble
Somewhere between the early-stage rocket ships and later-stage unicorns, there is a group of tech companies quietly building their businesses. Yesware is one of those companies.
The Boston-based maker of software for salespeople occupies a mid-stage niche in the startup market. The 70-person company has been around since 2010 and has been growing steadily. No one would accuse it of being caught in a bubble, which is refreshing. If anything, there has been a relative dearth of mid-stage funding deals over the past year or so.
Which brings us to some news. Yesware said today it has raised a $13.3 million Series C funding round. The deal was led by Foundry Group, which has been with the startup from the early days. Yesware’s other previous investors—Battery Ventures, Google Ventures, Golden Venture Partners, and IDG Ventures—also participated in the round. The company has raised $33 million to date.
Knowing Yesware’s CEO and founder Matthew Bellows, those particular numbers—and any talk of bubbles and inflated valuations—don’t mean a whole lot to the company. I spoke with Bellows back in April, when he was still fundraising. What stood out was his focus on executing his company’s strategy regardless of market factors beyond his control.
“At the end of the day, the entrepreneur still has to spend the money and build the company properly,” Bellows said then. “You still have to put the capital to work. Whether Yesware has a bubble valuation or a normal valuation, whether we have $20 million or $200 million in the bank, we have to spend the money wisely.”
He did have an interesting take on the huge growth-funding rounds that have been dominating the tech scene (see Uber, Dropbox, Snapchat).
“At a macro level, the big things driving the increase in dollars for startups, pre-public companies, is a global shift from fixed lower-risk investments towards equities,” he said.
Big investors “are chasing growth,” he added. “They want to take 5-6 percent of a trillion-dollar fund. Because of the globalization of capital, that’s not going to go away. There are larger and larger pools of capital to be invested. That’s not going to change. There are funding and valuation cycles up and down. I believe we’re on the high side now, and the general trend is up and to the right for the economy.”
Meanwhile, Yesware’s market has heated up. E-mail tracking and analytics tools for salespeople may sound niche-y, but it’s become quite a competitive field. In addition to big incumbents like Salesforce, Microsoft, and Oracle, marketing tech companies like HubSpot, Marketo, and Infusionsoft have related offerings.
Yesware has been building up its customer base, which includes companies like Acquia, Groupon, InsightSquared, and New Relic. The startup says nearly 700,000 salespeople have used its software, which works with Google Apps, Outlook, and iOS platforms.
Whatever happens in the sector, expect Yesware to stick to its guns when it comes to delivering products, building relationships, and defending its turf. “The most important thing remains: build a great business, help your customers, charge them a fair price,” Bellows said.