Neocase: A SME-SaaS Case Study (Part 2)
Check other articles in the series...SM: Under what circumstances did the company get started?
HP: Neocase Software was established 15 years ago in what can be considered one of the more challenging environment for providing quality customer service: a technical call center. Jean-Michael Cambot, a software guru who later went on to become the CTO with Business Objects, “cracked the case” of true collaboration applied to customer service. Cambot’s work set the technical foundation for the Neocase application, which quickly became a standard of excellence for technical call centers and help desks in Western Europe by integrating all the elements of the service chain.
SM: Who financed the company at the very beginning?
HP: France-based Supporter S.A. provided the initial financial support during the company’s inception. Since 1990, Supporter has remained a major actor in the field service and customer service markets.
SM: Did you raise Angel money?
HP: No.
SM: Did you raise Venture money?
HP: Neocase’s first round of venture funding came from Caisse des Dépôts. Caisse des Dépôts is a state-owned financial institution that performs public-interest missions on behalf of France’s central, regional and local governments. It also manages substantial portfolios of shares in listed companies, private equity investments and real estate assets.
The company’s second round of institutional venture funding was supported by Iris Capital. Iris Capital is a pan-European venture and development capital company specializing in media, communications and information technology. We recently announced this round.
SM: What stage are you at now?
HP: We recently closed our series B round of funding.
SM: What is the revenue & profitability status of the company?
HP: Neocase realized $2M in 2005. Our French headquarters has been profitable since 2003, and the American subsidiary is expected to reach profitability in 2007.
SM:What % of your business targets SME customers? Please describe your
experience marketing / selling to SME customers.
HP: Neocase has 3.8 million worldwide users, with over 120 corporate customer, 11 consecutive quarters of growth, and our overall annual growth rate has doubled every year. Our client base is divided between SME and larger enterprises. As our software can be marketed as an integrated solution with Microsoft Dynamics CRM, we have an active channel and work with many Microsoft resellers that are very experienced in selling to the SME market.
SM: What were/are your top challenges in building the business?
HP: Our top challenges have come with the internationalization of the company, particularly as we expand our presence to the U.S. Neocase, which was established in Europe, launched in the U.S. in early 2006. In establishing out U.S. based presence, it has been critical to build out a top U.S. executive team for Neocase, and the individual expertise which we have brought on board thus far will be instrumental in moving the company forward in the U.S. marketplace.
SM: Your advice to entrepreneurs building SaaS businesses?
HP: On a high level, I’d advise that there are three main points to keep in mind:
- Focus on the value proposition: Providing a SaaS business model is not enough, as customers will come to expect a solution that fits and is customizable to their specific needs.
- Build a robust platform: The software delivery should be state of the art. Therefore, you should invest in a word class hosting solution, provisioning process and data security.
- Be patient: The SaaS model is very interesting for software vendors but it is a volume business which needs to be built out over time. The resource capacities therefore need to be recognized to support such constraints.
SM: Are you looking to raise another round of funding?
HP: Yes, we are looking to raise our next round of funding in early 2007 to support the company’s continued development in both the U.S. and European markets.
SM: I like the fact that Neocase is able to leverage the Microsoft SME channel. I would say, leveraging some bigger player’s channel is critical for building SME focused SaaS businesses. Salesforce.com has App Exchange. SAP has a SDN program. Google is accumulating Office 2.0 SaaS applications, and I won’t be surprised if one of these days they too announce an App Exchange kind of model.
It also appears that NeoCase is now ready for a funding round from mainstream US VCs, and for that, congratulations!
ps. If you have an interesting SME-SaaS play, and want to discuss your strategy, please email me. Especially if your case study is interesting enough to publish.
This segment is part 2 in a 2 part series
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