Huddle CEO: 90% of our sales are inbound

Huddle CEO Alistair Mitchell explains how new funding puts the collaboration firm on track for expansion.

At a time when the Cloud Computing market is dominated by US technology suppliers, UK firm Huddle has been flying the flag for the UK.
 
The content collaboration firm – based in London’s Tech City – has opened offices in New York and San Francisco and will shortly be opening for business in Washington DC, reflecting its success in both the UK and US public sector markets.
 
This week the company has completed a $24 million Series C round of funding led by Jafco Ventures, with participation from DAG Ventures and existing investors Matrix Partners and Eden Ventures.
 
According to Tom Mawhinney, General Partner at Jafco Ventures, “Huddle’s strong, entrepreneurial team has already ensured that the company has gained significant momentum in the marketplace and I’m looking forward to the next stage of the company’s expansion.”
 
Following four quarters of record growth in 2011 and sales to enterprise customers increasing fivefold, Huddle has now raised $40 million in equity funding since the product’s launch in 2007. “We are a fast growth, venture backed company with both UK and US VCs,” says CEO Alistair Mitchell.
 
There are differences between the UK and US VCs, says Mitchell. “The early and late stage money is good over here, but the big gap is the middle,” he argues. “It’s definitely a gap that’s being filled by the US. US VCs are getting on planes and coming over here to make investments. It’s a cheap place to get talent.”
 
What’s the best thing a VC can do for a company like Huddle? “Get out of the way,” jokes Mitchell. “The best VCs allow you to make your mistakes. They make the relevant introductions, but generally they get out of the way and only intervene when they see some pattern recognition such as ‘we’ve seen this happen in other organisations before’.”

Collaboration and the Cloud
 
Operating as a start-up in the Cloud Computing space gives Huddle a competitive advantage over larger competitors who need to get used to a changed business model, argues Mitchell. “Everyone knows that traditional software is dead. Cloud is transforming how software is delivered and consumed. It is a completely different paradigm. This isn’t just taking your stuff and putting it onto a different server. It’s great being a start-up in this environment. We are competing with big guys on the basis that we can deliver something that they just can’t.
 
“The big difference that we see is that Cloud can open up the way in which people work. Cloud turns an enterprise which is a bound-in entity into something which is loosely federated. It transforms the way people work together. Work is not a particularly fun place to be but these new technologies can make it fun. We chose the Huddle name for a reason. You don’t hear people say ‘let’s have a meeting and Sharepoint it’, but you do have a meeting and huddle.”
 
The Cloud paradigm also demands new ways of tackling the sales function. “Our customers come to us,” says Mitchell. “Ninety percent of our sales are inbound. That can be quite challenging for sales teams. You try telling a guy who’s on £60k+£60k and who’s used to getting in his BMW and going out to see customers that what he’s now going to do is answer phone calls.
 
“What has changed over the past 6-8 months though is that we’re taking calls like the one the other day from a company that said they wanted to connect 85000 people across their global organisation. They’d been told it would take a year and half to do this and asked how fast we could do it. We said, next week.”
 
All of this ties into the need to frame the Cloud proposition in different ways. “CIOs have seen the speed and the costs benefits.  Previously it was all about cost savings but now it’s about how we can deliver this.  It’s about speed and pace and the way of working,” suggests Mitchell.
 
“You can’t just say ‘I’ve got a better widget’. You can’t rely on the technology or the product to win, you have to deliver something that is genuinely different. For us this is all about adoption of the service. We can promise much higher adoption rates than anyone else. We guarantee 100% adoption or we give you your money back.  No traditional on premise guy can offer that.”

With the new funding in place, Huddle’s plans for expansion seem to be on track. But given the recent spate of mergers and acquisition by larger technology firms trying to buy some skin in the Cloud game, Huddle’s success to date must make it a likely candidate for a predator’s takeover list.
 
Mitchell insists: “We’re in this to build a big company, something IPO-able. We’re not in this to flip tomorrow. We say internally ‘go big or go home’.”