ThinkingPhones gets $112M, renames itself Fuze to modernize office communication

Phone Switchboard Artsy

Plenty of offices around Boston looked like ghost towns in the past few days thanks to a series of snowstorms bearing down on the region. But at Fuze, a Cambridge software company that sells communications services to keep workers connected — whether they’re scattered or just staying home — it represented a perfect storm.

Fuze’s products tie workers together using mobile devices, desk phones, text messages, and video conferences. And yes, they use their own stuff.

“That’s why we’re not really all that concerned with whether people come to the office or not,” Fuze CEO Steve Kokinos said.

Investors apparently like what they see from the company’s growth: Fuze has raised a new round of $112 million in private financing, bringing its total fundraising to $200 million since it was founded in 2006.

The new money comes with a new name. The company was previously known as ThinkingPhones, but that made some people think its services were limited to phone calls, technical chief Derek Yoo said.

Fuze was a natural replacement. In addition to being a good reference to combining different streams of communication, it was already under the corporate umbrella after ThinkingPhones’ November acquisition of a San Francisco-area videoconferencing company of the same name.

Fuze also sells a wide range of business communications software, including Internet-based phone service, messaging apps that allow workers to communicate with each other, and a souped-up version of caller ID that culls information from a caller’s various online profiles to give someone answering the phone an idea of who they’re talking to.

Several of Fuze’s products are particularly suited to sales and customer-service departments. The company says it can give managers insight into how those workers perform by analyzing data about their communications with customers or sales prospects, which can be helpful in an era when salespeople are on the move with smartphones rather than churning through phone calls in a boiler room.

“Because we understand all of the conversations that people have, wehther it’s voice, text, or video, we can say `This is the level of activity that this salesperson had and this is the amount of business they close,’” Kokinos said.

The new investment is a large infusion of cash for a Boston-area tech startup. Co-founders Kokinos and Yoo declined to say whether the deal means Fuze has become one of the “unicorn” startups to achieve a $1 billion private-market valuation.

The recent trend of startups driving up their paper valuations has led more than a few startups to “do some unnatural things,” Yoo said.

That’s backed up by reports of onerous conditions protecting investors behind some billion-dollar startups and signs that those valuations are starting to whither amidst a broader slowdown in the capital markets

“We think the unicorn story is overdone at this point,” Kokinos said. “People should be talking about making great products for their customers.”

Fuze also declined to discuss its revenue, but said it now has about 1,200 clients worldwide. They include The Associated Press, Starbucks, Macys.com, Acquia, and Marketo. Fuze now has about 700 employees, up from about 250 a year ago. About half of its workers are in the Boston area.

Fuze competes with some of the biggest names in business technology, with tech giants like Google, Microsoft, and Cisco offering some combination of phone, videoconferencing, text chat, and related services.

And although it might not be as sexy as consumer mobile apps or e-commerce startups, controlling corporate communication has begun to attract a new wave of interest from startups and their deep-pocketed investors.

Slack is a prime example. A darling of the tech-office crowd, the startup has grown quickly by developing an easy-to-use chat application that can replace endless meetings and impenetrable email chains.

Fuze could make a dent in the market, research firm Gartner said in a recent report, partly because of its user-friendly interface and ability to connect to existing corporate software services, such as Salesforce and Microsoft’s Office suite.

But the company is still not terribly well-known, and being a small player in a big market makes it “difficult to keep pace with the breadth of larger competitors,” Gartner said.

The new investment could help Fuze battle those corporate titans. The company also is investing heavily, Yoo said, in making its user interfaces simpler and more appealing, akin to popular consumer software applications rather than the ancient enterprise software that most office workers love to hate.

Embracing that kind of change will become increasingly necessary for companies that want to embrace the surging population of millennial workers, who have grown up in a world of easy tech-enabled communications, Kokinos said.

“As younger people enter the workforce, they’re expecting their tools to be more messaging-centric,” he said. In that world, he added, the IT department quickly loses its ability to “force a solution that end users don’t want.”

Updated 10:55 am with additional detail about the company’s products.