Plivo Raises Seed Financing Round

Voice and messaging applications platform provider Plivo announced today that it has closed a $1.75M seed round of financing from investment firms Andreessen Horowitz, Battery Ventures, Qualcomm Incorporated, and SV Angel.

Founded in September 2011, Plivo is disrupting the hosted telephony space with the most scalable and feature-rich voice and messaging platform wrapped with flexible APIs and backed by 24/7 support. Plivo provides the highest level of reliability for enterprises that need a hosted environment for their voice and messaging applications, and enables enterprises, service providers, and web developers to build applications that seamlessly integrate the web with telephony, both fixed and mobile.

“What Amazon AWS did for web hosting in the cloud, Plivo is doing for telephony hosting,” says Venky Balasubramanian, co-founder of Plivo with Mike Ricordeau. The two developers met when they were both searching for a robust communications platform to develop voice applications. Finding none on the market, they collaborated to develop and launch Plivo.

“There are three key aspects to building voice and messaging apps,” Venky says: “Establishing carrier contracts, building the technology for the infrastructure, and building a team for operating and scaling it. We discovered it’s easy for our customers to get carrier contracts in place once they have decent volumes, so there’s little value-add for a platform provider to resell minutes. So instead of focusing on reselling carrier minutes, we concentrated on building a platform that offers the most reliable infrastructure and the highest level of scale with no carrier lock-in. We do provide carrier services if our customers need them; we have local phone numbers in 50 countries. The market response to our platform has been incredibly positive.”

Since Plivo went live just a few months ago, the company has quietly signed on dozens of enterprise-class customers.

One of them is Imprezzio, a software solutions company that works primarily with Fortune 100 insurance and financial customers. “Reliability and scalability are our top priorities, given the business our clients are in,” says Kelly Birr, CIO at Imprezzio. “Before switching to Plivo, we used another provider that essentially forced us to use their carrier contracts, at a huge markup, and just didn’t deliver on the reliability side. Our experience with Plivo has been completely different — the company and its platform are flexible and easy to work with, yet rock solid. They have exceeded our expectations at every turn.”

According to research firm Frost & Sullivan, the market opportunity for hosted telephony is large and growing. A 2011 Frost & Sullivan survey of 205 North American C-level executives and IT professionals found that 40% of respondents are using hosted services today, and 67% of current users plan to increase their usage over the next 12 months. Further, the firm expects the North American hosted IP Telephony and UC services installed base to grow at a 29.9% compound annual growth rate (CAGR) from 2011 to 2018.

“We are very excited about our investment in Plivo,” says Roger Lee, General Partner at Battery Ventures. “Hosted telephony is poised to explode as more companies move their applications to the cloud. Plivo’s technology delivers incredible value to enterprise customers and has the potential to seriously disrupt the space. We’re proud to partner with the management team and support the company to help drive growth and capture the opportunity ahead.”

According to Venky, Plivo plans to use the seed money primarily for continued innovation, sales, and marketing. Plivo currently has 17 employees, and plans to have more than 20 by year’s end. The company will also be expanding its platform beyond voice and messaging into areas such as WebRTC, which enables browser-based applications such as voice calls and video chat without plugins. “As more web browsers support WebRTC, we’re seeing strong interest from our customers,” says Mike Ricordeau. “We’re well down the WebRTC development path and will make some exciting product announcements later in the year.”