Friday, 8 April 2016
Intercom Raises $50 Million To Continue Heavy Investment in Product
Intercom, the customer communication platform on a mission to make internet business personal, today announced it has raised an additional $50 million, bringing its total funding to $116 million. The fast-growing company, which in the last year doubled overall headcount to 250 and grew revenues 4x into the 10s of millions of dollars, will use the funds to continue investing heavily in new and existing products on the Intercom Platform. The company is now fully funded and won’t need to raise further funds to reach profitability.
Index Ventures lead the round, with participation from previous investors ICONIQ Capital, Bessemer Venture Partners, and Social Capital.
Founded in 2011 in San Francisco, Intercom is a fundamentally new way for internet businesses to communicate with customers personally, at scale. It's one platform with a suite of integrated products for every team—including sales, marketing, product, and support. This contrasts with the old way where a business uses a tangle of point solutions, like marketing automation or helpdesk products, which leads to teams operating in silos and customers receiving disjointed and impersonal experiences.
Intercom now has over 10,000 paying customers in over 90 countries, up from 5,000 in April 2015, ranging from startups like Expensify and Trunk Club to public companies like Rackspace and IBM. Intercom’s customers communicate millions of times per day with 500 million of their end-users on the platform.
“We’ve been really fortunate at Intercom that our core focus on product continues to pay off,” said Intercom Co-founder and CEO Eoghan McCabe. “Unlike conventional software companies, the strength of our technology has generated incredible organic revenue growth, meaning we don’t have to pump a ton of capital into sales and marketing. We can continue to focus on building product to help businesses communicate with their customers in a more personal way.”
Most companies at Intercom's stage spend less than 50% of revenue, and have less than 30% of headcount working, on new product development. Last year Intercom spent 85% of its revenue, and had 50% of its headcount, on R&D.
“At Dropbox, we were always looking for ways to improve how we talked with customers,” said Ilya Fushman, General Partner at Index Ventures and former Head of Product at Dropbox. “A single platform to communicate with our customers throughout their lifecycle would have been our Holy Grail—and that’s Intercom. Along with solving this fundamental problem, their relentless focus on the end user and consistent investment in building the best product possible, have led to their rapid and highly efficient growth as a business.”