Preparing For An IPO, Online Customer Service Platform Zendesk Raises $60M From Redpoint, Goldman Sachs And OthersSeptember 12, 2012
by Leena Rao
Online customer service company Zendesk has raised $60 million in new financing led by Redpoint Ventures with participation by Index Ventures, GGV Capital, Goldman Sachs, Silicon Valley Bank, Charles River Ventures, Benchmark Capital and Matrix Partners. We’re told the round was $45 million in equity and $15 million in a credit facility. This brings Zendesk’s total funding to $86 million.
Launched in 2008, Zendesk offers a web-based, SaaS-delivered help desk/support ticketing application that gives companies a simple way to manage incoming support requests from end customers. Zendesk has 20,000 customers and says it delivers customer support to 70 million consumers in 140 countries. Customers include Box, Tumblr, and Yammer.
Zendesk has steadily expanded its product beyond just customer service, including adding a VoIP system, an iPad app, Twitter integration and more.
Zendesk founder and CEO Mikkel Svane sat down with us to talk about the funding, explaining that the new round will be primarily used for international expansion and product innovation. The company is also preparing for an IPO in the future, but doesn’t yet have a timeline for the offering. “An IPO is the goal,” says Svane. And monthly recurring revenue has grown five-fold since 2010 for the company. While Zendesk’s bread and butter has been catering to small to medium sized businesses, of late, the company has been pulled into a number of large enterprise deals, Svane says.
“Since our Series A investment in the very early days of Zendesk, we have watched Mikkel and his team build a great company and a platform that is loved by their customers, large and small,” said Devdutt Yellurkar, Partner at Charles River Ventures. “We are impressed with their growth, and Zendesk is ready for acceleration.”
The company is also debuting a new version of its application, which has been rebuilt from the ground up with a new, sleeker interface. The new features include an application framework, known as Zendesk Apps, designed to help companies make customer service the center of their business. The application framework allows an organization to extend Zendesk’s functionality with internal and third-party systems.
“Since we released Zendesk in 2007, the world has dramatically changed its perspective on customer service,” said Svane. “Consumers are more empowered than ever, forcing companies to completely rethink how they engage with their customers. Today’s consumers expect ubiquitous, real-time customer service that is transparent and authentic. And companies are remodeling their customer relationships from being transactional-based to lifetime-value based.”
Thew new API will help customers put service at the center of operations, says Svane. Another area where the company will be innovating is in mobile. We’ll also see deeper integrations with Twitter and Facebook, with the focus on helping companies meet their customers where they are interacting.