Investment boost for Aussie software minnow
"It's an opportunity to grow our business" ... Ben Duncan, founder of Atmail. Photo: Glenn Hunt
Queensland software minnow Atmail will accelerate its push into the cloud email space after a $2 million cash injection from local venture capitalist Starfish Ventures.
Established in 2000 by then teenage founder Ben Duncan, Atmail develops email and web communications software for large companies and telecoms vendors and is part of the Sunshine Coast start-up scene, north of Brisbane.
It targets organisations looking to outsource their email platform from on-premise to the cloud.
Its proprietary email product is deployed by 4500 organisations globally, including FedEx, GlaxoSmithKline and Virgin Atlantic - a customer base that helped the firm snag an Australian export award for small business in 2009.
In Australia it is used by a string of ISPs including iiNet, AAPT, Netspace and Westnet.
Atmail's latest product, Unified Communications Plus, enables customers to make and receive calls via a web interface. Based around a single phone number, the system allows incoming communications, whether voice, text or email, to be synchronised and responded to from any customer device.
It has been deployed by Malaysia's Yes 4G internet with voice network and will be rolled out progressively to other ISP customers.
Duncan said the funding would be used to push international sales and grow Atmail's developer team as it looked to consolidate its spot in the cloud email arena.
The firm has a staff of 15 and turnover of $2 million - both of which it hopes to double over the next year.
"There's a tremendous shift how it's all moving to the cloud," Duncan said.
"It's an opportunity to grow our business and carve out a niche. We've been cash flow positive for 10 years and we're ready to re-invest. [The funding is] enough to drive the product further."
Senior analyst at telecoms consultancy Telsyte, Rodney Gedda, said the investment was well timed.
"Atmail is expanding into a growing market, particularly if it can get its cloud-based offering right," Gedda said.
"The market size for business-grade email is large and growing. While the market is dominated by a number of large players like Microsoft, IBM and Google, there are countless smaller players and definitely room for more competition from the likes of Atmail."
Starfish has $400 million in funds under management and a stake in more than 60 local start-ups, including the crowd sourcing site DesignCrowd, comparison shopping web site iSelect and BugHerd.
The two companies were in contact for more than two years prior to inking this week's deal.
Starfish investment director Tony Glenning said the firm sized up Atmail's long-term form before agreeing to buy in.
"It takes time to build relationships and ascertain whether the team is worth backing," Glenning said.
"It also allows us to gauge the performance and market traction of the company and how it performs against milestones and budgets."
Atmail would benefit from Starfish's business experience as it entered a period of rapid growth, Glenning added.
While start-ups have struggled to get the funding they needed to expand in the past, Gedda said the situation was improving, as backers realised online services were not geographically bound and could be sold globally.