Auckland, 24 March 2016 -- Cloud services provider Virsae has raised $3 million in just under a year as it seeks to expand further into the US.
Virsae was launched in 2013 by Agile, which specialises in unified communications (the integration of telephone-based tasks with computers). Virsae provides cloud-based applications that manage unified communications and call centre environments.
The company’s flagship product, Virsae Service Management, processes more than four billion transactions a month. The company garners 85% of its revenue from offshore, mainly the US and the UK.
“We’re really pleased with our progress but we’re only scratching the surface in what is a multi-billion dollar category,” chief executive Tony Jayne says.
“We don’t have to wrestle a dominant player to the ground; our biggest job is educating the market.”
A formal valuation of the company hasn’t been done but Mr Jayne says Virsae had a pre-money valuation of approximately $12 million.
The company has more than 20 shareholders, most of whom have ties to Agile and parent company Comworth Group.
The recent round has brought in 10 new investors, including Auckland-based Ice Angels, which has a 4.4% stake.
When Virsae indicated the capital raising to NBR in May, ex-investment banker Mark Cross was appointed to the board. He now holds a 4.5% stake with his wife Angela Cross.
Mr Jayne says most of the money raised will be put into US sales operations and “channel development” (sales distribution) because the latter has been slower to develop than expected.
He won't divulge revenue figures but says it’s “seven figures” and 90% of it is monthly recurring revenue. He says sales revenue has doubled in each of the last two six-month periods and is on track to double again.
The company is aiming to break even by the middle of this year and raise a further $500,000 from investors.
Asked if there is a plan to float the company, Mr Jayne says capital requirements could demand it in the future but there is no immediate plan to.
Dependent on partners
The company’s indirect sales model depends heavily on its US and UK international partners. They sell Virsae’s products as part of their managed services to corporates.
“Through our partners, Virsae already supports hundreds of customers in the US – a market that many New Zealand technology providers have struggled to crack,” Mr Jayne says.
Virsae recently brought three new partners on board — US-based provider Continuum, and UK partner Kaptec.
Its largest partner is American unified communications company Arrow SI. And last year Virsae signed Westcon Group to distribute VSM in Europe, the Middle East, Singapore, Australia and New Zealand.
It also has re-sales agreements with California-based Altura — one of the largest communications solutions and services organisations in North America – and UK-based Azzurri Communications.