Voxeo issued a press release today announcing a $9 million investment by North Atlantic Capital and the Florida Growth Fund, but did not mention the $38 million it raised several years ago from Crosspoint and Mayfield.
Crosspoint’s Rich Shapero and Mayfield’s David Ladd were on Voxeo’s board — in November of 2001 they replaced other board members from those firms and expressed their confidence in and commitment to the company.
Thomson Reuters has Voxeo raising $78 million in funding between 2000 and 2002 and adds Silver Lake and Broadview Capital as investors, although Voxeo CEO Jonathan Taylor says some of that money was venture debt from Lighthouse.
In any case, things did not go as planned for Voxeo, which made and still makes a unified communications product (voice, instant messaging, Twitter etc.) for businesses. At its height, according to Taylor — who started Voxeo 10 years ago — the company had 180 employees led by a former executive from IBM. He says he tried to raise $4 million in venture capital and ended up asking for $40 million after he was rejected by VCs who told him their billion-dollar funds couldn’t accommodate such a small request.
“Everything was about the momentum, the dotcom,” he said. “We grew the company much faster and hired more people, more salesguys. Once it ended you were left with the expense momentum even though the appetite for funding was not what it was.”
Taylor had started to migrate out of the company, he says, but changed his mind and ended up buying it back from the shareholders after most of his employees were gone. The sale was completed in 2004. He and the 14 employees who were left — now majority owners — closed the Silicon Valley office (“there was this gloom that hung over everything”), moved the company to Florida where Taylor is from and went without paychecks for several months until Voxeo was profitable enough to pay them.
He declines to say how much money he put in, but he credits Mayfield and Crosspoint for supporting him in the sale. “They are some of the most mature VCs,” he said. “A lot of VCs would try to shut a company down and liquidate and try to squeeze out every penny…but we all agreed the sale was the best thing for Voxeo, to bring it down to a smaller entity.”
Voxeo is back up to 150 employees, and Taylor plans to use the new funding to make acquisitions — he’s already acquired three companies in the last 14 months. He compares the tech M&A market now to the housing market: “There are now lots of attractive mergers and acquisitions and a lot of sellers, but not a lot of buyers.”
I have calls out to Shapero and Ladd — if they have anything to add, I’ll update this post.