Steve Kokinos couldn't be clearer about his intentions for Fuze, the Cambridge-based startup that can replace most of your company's communications needs with a unified cloud service: The company still plans to go public, likely next year.
In preparation for that milestone, Fuze has closed on a new $104 million round, the company announced on Wednesday, following the similarly sized $112 million round it closed about a year ago. The new round, which brings total funding to $304 million, was led by Wellington Management Company, an investment firm with over $998 billion in assets under management that has invested in big-name startups like Pinterest, Airbnb, Magic Leap and Warby Parker.
"Our view was we would do one last round pre-IPO."
"Our view was we would do one last round pre-IPO," Kokinos, Fuze's CEO, told me, referencing the company's plan to file for an initial public offering sometime next year, though there isn't a firm timeline in place. He said it was important to have great investors that could also serve as anchor tenants for the IPO. Other investors in the round included Greenspring Associates, Summit Partners, Bessemer Venture Partners and G20, the latter three of which are all return investors.
Originally known as ThinkingPhones, the company renamed itself last year to Fuze, the name of the cloud-based video conferencing company it acquired in 2015. The company offers a cloud-based unified communications service that provides voice, video and messaging capabilities, allowing companies to replace five to seven disparate services typically, Kokinos said. That, in turn, can help companies save up to 50 percent on their communications needs, he added.
The new funding will be used to expand the company's international presence and further product development for Fuze's enterprise customer segment while fighting against larger competitors like Microsoft and Cisco. At around 700 employees, Kokinos said the company plans to continue hiring employees in sales, marketing, product and other departments.
Kokinos declined to state Fuze's new valuation, only saying that it was higher than the previous round. An analysis by Pitchbook last year had pegged Fuze's valuation at $722.74 million, a figure the firm reached through a proprietary process using a combination of public files. Forbes last year named Fuze as one of its Next-Billion Dollar Startups.
The financing comes after Fuze increased sales by 90 percent and added 449 new customers last year — including The National Geographic Society and The Rockport Group — bringing its total customer count to more than 1,500. While Kokinos declined to provide revenue numbers, he said the company's top 10 deals from last year represented a combined $71 million in contract value. A little more than one-third of new business from 2016 came from outside North America.
To support its international growth, Fuze has expanded in Asia Pacific with a new Sydney office and three data centers in Hong Kong, Singapore and Sydney. It also expanded its presence in Europe with new offices in Munich, Zurich and Madrid, adding to its offices in the United Kingdon, the Netherland, Denmark, Portugal and France. Besides Cambridge, the company's other North American offices are in Ottawa, Chicago, Palo Alto, New York and Seattle.
