In the venture capital business, you occasionally see companies rising from the ashes of a venture disaster. Companies go down to their last month of payroll and yet find a way to survive and, later, flourish. But rarely do you see a once-publicly-traded company de-list itself and find a way to package together winning technology architecture and a brand new business.
Yet at Index, that’s what we found with Fuzebox.
Back in the telecom bubble, there was a company called CallWave that went public with the fanfare fitting of the era. It offered a service that bridged the world of telephony and the Internet: consumers were able to see caller ID and listen to voicemail without logging off. After a hot start, the telecom bubble burst. CallWave’s customers rapidly migrated to broadband and their business came tumbling down. After a few years of stagnation, the company decided to look for a new CEO. In 2008, Jeff Cavins – the former CEO of Loudeye (NASDAQ: LOUD) -agreed to “rescue” what was left of the CallWave business. Jeff, like most of us, was fed up with the lousy conferencing experiences offered by incumbent vendors. So he launched a plan to recast the company’s strategy to solve this problem. Jeff combed through CallWave’s people and technology assets to figure out what value was left, made a few acquisitions, and hired Ritesh Bansal, a rockstar IIT graduate who had worked in a few not-so-recognized start-ups in the IP telephony and collaboration world. In order to unburden him from the company’s legacy, Jeff made the bold decision of delisting from the NASDAQ in 2009. CallWave had a new technology to build and needed to focus on that mission.
Jeff and Ritesh’s vision was that two big shifts in the technology world were going to dramatically alter the visual collaboration market. The first was the advent of cloud computing and the widespread adoption of SaaS. Conventional video technologies required expensive, dedicated hardware. Cloud computing, which had begun to gain traction, obviated the need for these systems and created an opportunity to move all the server software to the cloud. Jeff and Ritesh believed that the collaboration software of the future would be offered as a service rather than as bulky hardware to be installed in a room.
The second big trend that Jeff and Ritesh bet on was on the rapid entry of smart mobile devices into the enterprise market. Employees were beginning to incorporate iPhones, iPads, and Android-based phones and tablets into their everyday work. These were powerful devices with video rendering capability and cameras. Jeff and Ritesh knew that they needed to build a product that could be used across any smartphone and tablet device.
These were seminal changes in the enterprise collaboration universe. Armed with this vision, Ritesh and his engineering team built a real time visual collaboration product that is second to none. FuzeMeeting is a cloud-based MCU-- a server that bridges the connections of a videoconference--with the ability to connect to mobile devices, desktops, and telepresence systems of many different varieties. It has the ability to share videoconferences, data applications and desktops seamlessly and simultaneously. As the Index partners joined into the powerpoint presentation from 3 continents on their iPads (and we pinched and zoomed the document like it was Google Maps….), we were blown away by what Ritesh and his team had built.
Jeff renamed the company “FuzeBox” and decided to go after the Fortune 5000 market. In the start-up world, that’s not for the faint of heart. But Jeff firmly believed that those most in need of a change were large corporations stuck with dated legacy solutions. Today FuzeBox’s clients are some of the biggest brands across industries as diverse as healthcare, education, telecommunications and retail: General Motors, Kellogg’s, Spotify, Tory Burch, Verizon, Honeywell. In the last year alone, the number of invitees per meeting has doubled, and Fuzebox now hosts around 78,000 meetings per day.
To be honest, it took us a while at Index to convince ourselves of this investment. As a VC, you tend to favor clean-sheet developments from scratch. Typically, it’s just too much work to try to turn things around – especially for a company with a long and storied history. But having used the product for countless meetings and having customers around the world throw glowing references at us, the answer became obvious: Fuzebox is a gem. We were also thoroughly impressed with the entrepreneurship and customer focus of Jeff and Ritesh. In a climate where it is so easy to start something now, the tenacity of this team that had found a way to resurrect Fuze from the ashes of CallWave proved to us that this company was capable of incredible success.
We are delighted to be joined by Khosla Ventures and Insight Capital in this venture – both firms for whom we have a lot of respect for and have worked with many times in the past. And, most of all, we are honored to be working with Jeff, Ritesh, and the rest of the Fuzebox team to build the next generation visual collaboration company.
Mike