Deal Radar 2008: Jive Software

A leader in web collaboration, Jive Software makes business social software that connects employees to each other and to their clients and partners. Their main focus is to improve teamwork and increase productivity through the use of their primary products, Clearspace and Clearspace Community. Other products include Jive Forums, a forum software, and Openfire, an open source server.

Jive Software was founded in 2001 by Matt Tucker and Bill Lynch and is based in Portland, Oregon. It has around 150 employees. After bootstrapping for several years, the company received a $15 million Series A round of financing from Sequoia Capital in August 2007.

Also in 2007, Jive released an updated version of their popular Openfire with added VoIP capabilities. This allows people to talk to each other through their computers while sending messages across and sharing screens. A basic version is available free to users while a higher-end version is available to companies for $15 per user per year. Clearspace is available to users for $50-$60 per user per year. In April of this year, Jive acquired Jotlet, makers of an online calendar software. Jive will use Jotlet’s technology to improve the calendar functions of Clearspace.

This year, Jive Software ranked #639 on the Inc. 5000 list of the fastest-growing private companies in the US. In addition, Inc. ranked Jive #40 in the Top 100 Software Companies. Jive Software also won the UK-based IT Week Editor’s Choice Award for 2008 for Clearspace.

According to VentureBeat, 2Q07 revenue was double that of the same period in the previous year. Sales for 2007 crossed $15 million. The company has been profitable since its inception, largely due to its Clearspace Community, and in 2008 it should cross $30 million in revenue. That would put Jive’s valuation easily in the $150 million range, even in a soft market.

Jive Software has over 2,500 customers including Intel, PC World, BBC, SAP, and Sony Ericsson. Over 15% of the Fortune 500 is part of their client base. Other companies offering similar products are Microsoft’s SharePoint, Dropbox, Socialtext, 37Signals and NewsGator.

The collaboration market is expected to reach $9 billion by 2009, which explains why we have so many players carving out different niches and building interesting businesses. Several of these companies will likely cross the $100 million revenue threshold by 2010, which means that in 2011 we should expect to see a series of IPOs in the collaboration software market.

This segment is a part in the series : Deal Radar 2008