In a report released last year, researchers at firm Point Topic estimated that voice over Internet protocol (VoIP) technology had more than 120 million subscribers worldwide. The report estimated the industry would grow to $40 billion by 2015. VoIP technology has helped many small and medium businesses (SMBs) establish a much bigger presence in the market. Recent news suggests that RingCentral, a leading player catering to SMB demand for phone systems over the cloud, may be looking at raising their IPO.
RingCentral was founded in 2003 in San Mateo, California, by Vlad Shmunis and Vlad Vendrow. Today, RingCentral offers hosted phone systems through their flagship products RingCentral Office, RingCentral Mobile, and RingCentral Internet Fax. RingCentral Office is a VoIP service that enables businesses to connect teams in different locations and has features such as multi-extension business phone systems, fax service, unlimited calling, and pre-configured phones. RingCentral Mobile is a service that gives customers access to a single local or toll-free number that connects their existing phone lines as virtual extensions and comes with advanced call forwarding and answering rules. Finally, RingCentral Fax is an Internet fax product that provides the ability to send and receive faxes through the Internet. I had interviewed Mr. Shumnis a few years ago where he told me about how RingCentral evolved into the present day PBX as SaaS offering. You can read my interview here.
Like other telecom services providers, RingCentral earns revenues through monthly subscriptions. Their integrated RingCentral Office is the most expensive offering at a starting price of $19.99 a month. The Mobile service is available for $9.99 a month, and the Fax service costs the least at $7.99 a month. Most products are sold with a free minimum user lines, minutes, or pages and charges customers an additional cost for extra use.
RingCentral’s financials are largely unknown. However, the company does claim that it caters to more than 200,000 customers across the U.S., Canada, and the U.K. To date, it has raised $44 million in funding from investors, including Khosla Ventures, Sequoia Capital, DAG Ventures, and Cisco Systems.
RingCentral’s Expanding Market Reach
RingCentral has been partnering with several companies to expand their market presence. Last year, it tied up with AT&T in the U.S. and with Rogers in Canada to offer its services to the customers of these wireless carriers. As part of its marketing efforts, it has tied up with other SMB-focused organization such as VistaPrint, GoDaddy, and LegalZoom, to name a few.
In addition, RingCentral is releasing new features through integration of their offerings with other business tools. Last year, it worked with DropBox and Google Docs to release CloudConnect, an integrated fax service. It recently launched a new feature, CloudPresence, that lets employees of an organization see if their colleagues are available on the phone or not, irrespective of their device or location.
The market has been abuzz with news that RingCentral may soon be going public. Earlier last quarter, it hired a new CFO, Robert J. Lawson, whom many believe will help the company with its filing. RingCentral has neither confirmed nor denied reports. The market, though, remains hopeful that its S1 will be out before the end of this year.