UK enterprise collaboration and storage startup Huddle todayannounced that it has raised $51 million (£32 million) from Silicon Valley and European investors in its largest funding round to date, bringing total investment in the company up to $89 million (£57 million).
The money, raised through a Series D round, will be used to help Huddle double the size of its product development team from 80 to 160 and expand the company’s presence in the US and the UK.
"I’d say we’re certainly on our way to becoming a billion dollar company and it’s the ambition we’ve had for some time," Huddle co-founder Andy McLoughlin told Techworld ahead of the announcement. "The funding round we have now is really all about acceleration. Taking the team we have, the markets we’re serving, and the product we’ve built, and just turning everything up to 11."
Huddle revealed earlier this year that it wasn't yet ready to IPO like its rival Box.
"IPO is something we’re aiming for but we’re probably still a little way away yet," said McLoughlin. "I think the financial markets are a little bit fuzzy right now as well."
The financing round was led by Zouk Capital, with participation from the Hermes GPE Environmental Innovation Fund, managed by Hermes GPE, and all existing investors, including Matrix Partners, Jafco Ventures, DAG Ventures, and Eden Ventures. Nathan Medlock, partner at Zouk Capital, led the deal and will join the Huddle board.
Huddle, which has been selected as one of the UK's fastest growing tech companies by Tech City UK, signed three times as many deals with enterprise customers in the first three quarters of 2014 as it did over the same period last year. The company also secured seven of its 10 biggest contracts to date in the same time frame. Customers include Grant Thornton, Baker Tilly International, National Grid, P&G, Keolis, Williams Lea, Driscoll’s and Panasonic Europe.
Following the launch of its US government offering in 2013, Huddle has also added four US federal agencies to its portfolio. Globally, the company’s government customers include 80 percent of central UK government departments, NASA, the Office of the Secretary of Defense, Government of Greenland, the NHS and several local government organisations.
But the company still wants to get more business from certain areas of the private sector. "Without naming any specific names, we’re going to be going after a few of the large management consultancies very hard over the next few months," said McLoughlin.
'It's not easy'
Despite its success over the last year, raising tens of millions of pounds isn't easy, according to McLoughlin.
"Every funding round is hard," he said. "The later you are in the game, the easier it is because investors know you but the harder it is to do because it’s like herding cats.
"It’s not just us raising money, you’ve got to bring along all the other investors as well and everyone’s fighting about how much of a stake they want to get. Obviously you have to leave enough room for the incoming investors as well so it’s a fun ever-moving jigsaw."
Further, McLoughlin said that being part of Tech City UK's much-hyped Future Fifty programme made "zero" difference to Huddle when it came to raising money, building on what business partner Ali Mitchell said earlier this year.
Huddle is competing with a number of cloud storage and collaboration vendors including Box, Dropbox and Google Drive. However, Mitchell believes that Huddle's security offering is tighter than that of its competitors, something that allows it to secure lucrative deals with governments and multinational professional services organisations like KPMG.
Vanessa Thompson, research director, enterprise social networks and collaborative technologies at IDC, said: “The value of cloud content collaboration solutions is increasingly being realised by organisations, particularly because they are easy to provision and enable streamlined access for mobile users.
“Forming a workspace environment for users that brings together content collaboration capabilities, as well as context from other systems, means that users only need to be in one place to get work done. This becomes increasingly critical as users are being asked to do more with less time.”
Jim Lundy, CEO and lead analyst at Aragon Research, said: “Content has always been the critical part of work and Huddle is making it easier for teams to securely access and work on content with their entire business community.
“The world of business apps is changing and predictive content is one of the ways that Huddle is making it easier and faster to find and share content.”