Communications Tech Firm Fuze Gulps $104M, Eyes IPO in 2018
Investors just heaped another pile of money on Fuze, already one of the better-funded tech companies in New England.
Today, the Cambridge, MA-based software firm announced a $104 million equity investment led by Wellington Management Company. Other investors in the round include Greenspring Associates and earlier Fuze backers Summit Partners, Bessemer Venture Partners, and G20 Ventures.
The big investment comes almost one year to the day after Fuze raked in a $112 million growth equity round. The company, which provides cloud-based business communications software, has now raised $304 million in total outside funding since CEO Steve Kokinos (pictured above) and chief technology officer Derek Yoo founded the business in 2005.
In an e-mailed statement attributed to Kokinos, he declined to comment on Fuze’s valuation. “This was an up round, and we’re really happy with the outcome,” he said.
Fuze is one of the more closely watched IPO candidates in the Boston area, and the latest funding will only intensify the spotlight.
Kokinos said it’s “likely” Fuze will go public next year. “But we also aren’t in any rush,” he added.
At the time of last year’s investment, Kokinos said the $112 million funding round should be the last outside capital that Fuze would need to reach profitability. It looks like the company decided to raise more money from investors and go for growth instead.
“It just comes down to market opportunity,” Kokinos said in the e-mailed statement. “We’ve seen a big shift with enterprises accelerating their movement to the cloud, and are building on our lead in the market by continuing to invest across the board.”
In a press release, Fuze said it plans to pour the new money into product development and more international expansion. That includes rolling out its services in Latin America this year, Kokinos said.
The company was originally known as Thinking Phone Networks and later ThinkingPhones, a nod to its focus on voice communications in its early years. But it later expanded its products to encompass a broad mix of communication tools that work on mobile devices and can integrate with outside applications like Salesforce and LinkedIn.
The firm bolstered its product offerings and customer base through three acquisitions in the past three years: Whaleback Managed Services, which provided cloud-based communication services to medium-sized businesses; Contactive, an advanced caller ID and data analytics company; and Fuze, which provided cloud-based video conferencing, voice calling, and document sharing services. Last year, ThinkingPhones adopted the name Fuze to emphasize its variety of communications tools.
Fuze is part of a wave of companies helping shift businesses’ communication tools to the cloud and unifying the functions in one software platform. Others in the sector include RingCentral, ShoreTel, and Mitel, along with products from big companies like Microsoft and Google.
As a private company, Fuze doesn’t disclose its financials, so it’s hard to tell how well the business is doing. But in the press release, Fuze said it grew sales last year by 90 percent and added 449 new customers. Fuze said its 10 largest customer contracts signed in 2016 are worth a combined $71 million.
The company has been making an international push. Last year, it opened a new office in Australia and three new data centers in Hong Kong, Singapore, and Australia. It also opened new offices in Germany, Switzerland, and Spain. (The company said it already had operations in the U.K., the Netherlands, Denmark, Portugal, and France.)
Those efforts seem to be paying off: Kokinos said more than 35 percent of Fuze’s sales now come from customers based outside of North America.
Fuze employs more than 700 people, Kokinos said. That’s about the same headcount as the company reported a year ago.
“We plan to grow over the next few years but don’t have an exact number,” he said.