Zendesk Snags $19M for Web-based Customer Support That Users Can Grok, and Startups Can Afford

(Page 2 of 2)

specialized in acquiring small-business customers. “What SaaS has enabled is the ability to bring these solutions to smaller businesses and give them big-company-like capabilities.”

That said, Svane hopes to use some of the new cash to bolster Zendesk’s abilities to serve large enterprises as well as small ones. “To be completely frank, we haven’t been really good at dealing with larger customers up to now, and getting better at that requires a lot of investment,” he says. That’s partly because Zendesk has to compete with other leading companies in San Francisco and Silicon Valley for the top engineering talent, which is expensive. The company, which was born in Denmark, also wants to expand its base of international customers. In short, “We are no longer just a few guys with a product,” says Svane. “We are building an actual company, and that’s not cheap.”

At the same time as its Series C funding announcement, Zendesk said at this week’s Dreamforce 2010 event in San Francisco that it has come up with new ways to integrate its software with Salesforce. And on a more lighthearted note indicative of the company’s quirky and informal culture, Zendesk is running a 10-part series of Web videos this month entitled “Merry Holidays, Please Hold.” The viral marketing campaign takes a humorous look at the history of bad customer service, starting off with a fairly cutting parody of a TED talk.

Zendesk occupies most of a floor at PMI Properties’ office building at 410 Townsend, which is also home to Yammer and Eventbrite. All three companies are in rapid-change mode. Eventbrite collected $20 million in Series D funding in August. And just last week Yammer raised $25 million in Series C financing. So it wouldn’t be surprising to see one or more of the organizations seeking larger quarters. (Playdom, OpenDNS, Shop It To Me, and TechCrunch are also based at 410 Townsend.)

“We are all growing out of our spaces here, so we are all looking at each other to see who is going to make the first move,” says Svane. “My suggestion was to have a showdown at the OK Corral.”

Single PageCurrently on Page: 1 2 previous page

Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

Trending on Xconomy