Tech IPOs are sparse in the Boston area (and the rest of the country), but the pipeline seems to grow more crowded every day.
The latest local IPO candidate is Cambridge, MA-based ThinkingPhones, which today announced a $112 million growth equity round and a new name.
The company—which provides cloud-based business communications software—now goes by Fuze, the name of a firm it acquired in November. The new funding round was led by Summit Partners, which was joined by previous backers Bessemer Venture Partners and Technology Crossover Ventures.
Fuze said it has hauled in $200 million total from investors since CEO Steve Kokinos (pictured above) and chief technology officer Derek Yoo founded the company a decade ago. That makes it one of the biggest technology bets in New England, although Kokinos wouldn’t share Fuze’s valuation. “Our view is that the whole unicorn thing is overplayed at this point,” he said.
Fuze’s leaders plan to take the company public, Kokinos said, declining to give a specific timeline. The new funding round should be the last outside capital the company needs to reach profitability, he added.
“We’re going to build a big, standalone business,” Kokinos said. “We think an IPO could be a stop along the way.” That’s easier said than done in the current environment, but it’s worth mentioning that Acacia Communications, another Massachusetts tech company backed by Summit, filed plans in December to go public. (We’ll see if Acacia follows through.)
Kokinos wouldn’t share Fuze’s revenue figures, but he said it has more than doubled annual sales in each of the past three years. That’s the projection for 2016, too.
The company, which currently employs more than 700 people worldwide, will keep hiring and expanding its physical presence around the globe, including bringing more data centers online, Kokinos said. (Again, he was mum on specifics.)
Fuze is part of a wave of companies helping shift businesses’ communication tools—phone systems, video conferencing, text messaging, document and data sharing programs—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.
Despite the crowded field, it’s still early days for this industry. Only a small fraction of medium and large-sized businesses have switched to cloud-based communication systems, Kokinos said, citing data from research firm Gartner.
“One of the really exciting parts of our business is the total addressable market is so huge,” Kokinos said. “We haven’t really scratched the surface yet. We think this is one of the last really big areas that is just starting to get to the big wave of migration to the cloud.”
In its early years, Kokinos’s company focused mostly on voice communications. But it later grew 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 two 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.
The decision by ThinkingPhones to adopt the Fuze moniker was meant to emphasize the company’s “take on a holistic view of communications, since we’re doing so much more than just phones,” Kokinos said.
