Zipwhip raises $22.5M to expand its text messaging platform for businesses

As apps like WhatsApp, Facebook and Viber gear up to let businesses use their messaging apps to speak with their customers, there is a parallel track of development happening outside those walled gardens. A startup that has built an open service — sitting outside any specific messaging app — to let businesses communicate with customers by text, has raised a notable round of funding.

Zipwhip, which has built a texting platform for businesses to send and receive texts (and more) via their landlines, has raised $22.5 million. This Series C round of funding is led by OpenView, with participation also from previous investors Voyager Capital and Microsoft Ventures.

It will be used to build out Zipwhip’s customer base, its functionality, and its partnerships: John Lauer, the startup’s CEO, told TechCrunch in an interview that it expects to be one of the first partners for Business Chat, a new service from Apple that will let businesses communicate with customers and let them make purchases via iMessage. It’s also an early partner for RCS, the rich-text messaging standard that has been adopted by Google for Android devices (commonly thought of as Android’s answer to iMessage).

The medium is the text message

Messaging has long been viewed one of the “killer apps” for mobile phones, by some estimates used more than social networks, traditional voice networks and other popular services on smart phones.

There is currently a disconnect between that trend and how businesses operate, though. There are around 200 million business telephone numbers globally, which companies (especially smaller ones) still continue to use as a contact point with customers. But most of those have absolutely no texting functionality today.

“It’s clear that communication today is centered around messaging, but for too long businesses have been behind on delivering an easy and intuitive way for their customers to get in touch. Zipwhip provides the answer through its game-changing software and platform,” said Scott Maxwell, founder and Managing Partner at OpenView, who is joining the Zipwhip board with this round. 

So it’s little surprise to see companies looking to tap into messaging not just as a customer service channel, but as a way to potentially expand its business. While some businesses will develop completely new profiles on existing messaging apps, there remain others who will look to solutions that will have more ubiquity. Lauer said that today Zipwhip has around 6,500 business customers, with monthly recurring revenues in the last year growing by 60 percent.

Zipwhip has built its business around the basic premise of mapping your landline (or other) number to a messaging service that a business can access and use from a computer dashboard. Over time it has taken this idea and expanded it as a CRM platform of sorts. In volume-based tiers of $35/month, $100/month or more for larger deployments, the company today offers services like integration with your contacts database, picture messaging, auto replies, scheduled messages, and more.

Down the line, the company plans to add more texting features and functionality. Some of this is based on how the platform is already being used: “We’ve seen car dealerships make sales on our platform,” Lauer said, adding that the company plans to add more formal purchasing options in the future with point-of-sale integrations.

“If you think about it, why can’t you text to order your pizza?” he asked. “It’s as natural as anything that you should be able to text what you want, and your number should instantly link up with your address.”

It’s also planning more integrations with CRM tools, which could put Zipwhip to closer competition with Salesforce, which acquired a competitor, Heywire, last year.

Another area that Zipwhip has yet to touch are chatbots. “We want to do bots the right way,” said Lauer. “Most you never want to talk to it and you hit zero many times to talk to a human as quickly as possible.” Indeed, talking is also a feature that may not come soon. “Switching to voice is one area we do keep looking at, especially since we do a lot of work with landline operators already.”

To date, Zipwhip has raised just under $40 million. It’s not disclosing its valuation with this round.

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