Voxer, a walkie talkie mobile app that lets you talk to friends across iPhones and Androids, looked like an overnight success last November when it soared to its current place as a top social networking app in the app stores. But the company is five years old and has been working hard to figure out the software and design it needed to win big.
It’s ready to go all the way, having just closed a funding round of more than $30 million led by Institutional Venture Partners, Intel Capital and numerous angels including SV Angel, CrunchFund, Chris Dixon and Roger McNamee, I’ve heard from multiple source. The company has confirmed the amount and agreed to share more — but it didn’t confirm the valuation, which I hear ended up at $180 million pre-money after a couple months of discussions with many interested investors.
Its long history helps explain why it went with firms known for their later-stage investments. Over the course of its life it has raised nearly $20 million, the majority of which has come from founder Tom Katis. Conceived of during his time serving in the Special Forces in Afghanistan, he originally thought the company would be for enterprises — large dispersed groups that needed a way to quickly share what was happening.
And it is, to some degree. He says that big organizations like hospitals and businesses are using it. But the app turned out to be fundamentally viral, as it discovered in November. Starting in a few Midwestern cities and growing out from there, Voxer has anecdotally spread to high schools, small towns, families… Katis says that based on the numbers and the inbound emails from users, it’s getting used in most circumstances you can think of. Usage numbers are healthily in the “double digit millions [of monthly uniques],” he adds. Less anecdotally, it has top rankings in the app stores for countries around the world, according to App Annie.
So how has it grown? While the app has made heavy use of Facebook to help users find and invite friends, Katis and Gustaf Alstromer (its head of growth, a long-time mobile entrepreneur), tell me that it’s word of mouth more than anything else. How do they know? “When new users discover how to use it they tend to get excited and tell friends to get it, because it is a brand new experience that seems to fill a void. It’s the etiquette of text messages but is faster and easier and uses live voice.”
The future of voice is what the big plan is really about.
The company believes it can be one of the key services of the mobile-first world, like Instagram has become for photos and like Path intends to become for social networking. Smartphone penetration has only just grown to the point that the combined market size of iOS, Android and other platforms are surpassing feature phones in the US and across the world. Mobile is where the next 1 billion users are at.
“We’ve seen Zynga and others do it in games, we’ve obviously witnessed first-hand with Shazam, Pandora, Spotify and others in the music space,” IVP’s Dennis Phelps adds, managing to include some of his firm’s investments in that statement. “We think Voxer has the ability to become the 800-pound gorilla when it comes to voice messaging — a fundamentally different and more convenient way to communicate.”
Which points to where the new funding will go — infrastructure, and hiring more engineers, particularly out of the Node.js developer community. Katis, a serial entrepreneur who still co-owns his previous hit, security contractor Triple Canopy, says the long-term plan here is to build a big-freestanding business. So, a possible IPO candidate, that his new investors could provide the follow-on rounds to help it get there.