After experiencing massive revenue and headcount growth in the past two years, St. Louis technology startup Textel plans to double down on its expansion efforts as it pursues fresh funding from investors.
Textel, which has developed text messaging software for contact centers and businesses, said its annual revenue increased by more than 70% year over year in 2021. That growth came as the startup says it experienced 57% growth in new customers last year. The company did not disclose specific revenue figures.
“The reason being is business communications are more critical than ever,” said James Diel, founder CEO of Textel. “The pandemic has had a significant impact on how we work, how we live and how we communicate. Text messaging, while it’s been around awhile and is nothing new, it is new to businesses and it is new to them as they try to adopt how do I efficiently, effectively, and without spamming, communicate with my customers in the way they want to communicate, which oftentimes is texting messaging.”
A study from software firm Soprano Design, a text messaging technology company based in North Sydney, Australia, found that 85% of consumers with smartphones said they prefer text messages to calls or emails from businesses. The study also found that individuals on average more quickly open and respond to text messages compared to email.
Diel said Textel’s rapid growth comes as it has expanded partnerships to integrate its technology into software used by call centers and businesses. Textel has integrated its technology with firms that include contact center technology company Genesys; contact center software firm Five9; and telecom company RingCentral (NYSE: RNG). In addition to growing its customer base, Diel said Textel has also experienced expansion with several clients who began using its texting technology at a small scale and increased their application of it. Textel, founded in 2014, says it has 1,400 customers.
As it's grown its revenue and customer base, Textel has also increased its workforce, adding sales and software engineering staff. It currently has a team of 36 employees, up from 6 at the beginning of 2020. The startup’s growth comes after it raised $4 million in 2020 in a Series A round led by local venture capital firm Cultivation Capital leading its financing. Other investors in the company include Denver-based Stout Street Capital and Mequon, Wisconsin-based Capital Midwest Fund. Textel is back on the hunt for fresh funding, eyeing $10 million to $15 million in capital, to help accelerate its growth further, Diel said.
Textel is confident its growth trajectory will continue, with Diel saying the startup is projecting 100% revenue growth this year. He expects increased adoption of texting messaging from contact centers and businesses will create new customers for the startup.
“We see that accelerated growth for the next three to five years is definitely a huge possibility for us because of the market as it sits today, which is relatively untapped,” Diel said.
