Zendesk Raises $60M from GGV Capital and Others

Today Zendesk, the leader in SaaS-based customer service, announced a $60M financing, including $45M in equity, from GGV Capital, Redpoint, Index, Goldman Sachs and existing investors CRV, Benchmark and Matrix.

Zendesk was founded in 2007 in Copenhagen Denmark by Mikkel Svanne and his two co-founders Alexander Aghassipour and Morten Primdahl.  From inception, Mikkel saw the opportunity to provide customer service software to thousands of  companies by taking advantage of the cloud.  With Zendesk’s popularity growing, Mikkel moved the company to the US, ultimately settling it in San Francisco and raising financing from CRV, Benchmark and Matrix.  By 2009, Zendesk announced 1,000 customers, and then in 2010, the company signed customer number 5,000!

We first met Mikkel a few years ago.  We were struck immediately by Mikkel’s vision for Zendesk – to enable companies to rethink how they engage with their customers, putting customers at the center of the operating model.  Thanks to Zendesk, over 20,000 companies are now remodeling their customer relationships from being transactional-based to lifetime-value based.

When Mikkel called to let us know Zendesk was going to seek another round of capital, we moved expeditiously.  Among the many attractive elements of the Zendesk opportunity, a few of the top elements of our investment thesis include:

  • Product Excellence.  We’ve spoken to countless companies, many in the GGV portfolio, who use Zendesk and users universally love the solution.  Today the company also announced the release of its next generation product platform, enhancing the user interface, adding functionality and opening the platform via an application framework, enabling Zendesk users to extend the product’s functionality via internal and third-party solutions.
  • Best of Breed Operating Model in Huge Market.  Zendesk has established leadership in cloud based customer service and reached 20,000 customers all on less than $20M of capital.  The company has been able to achieve so much on so little because the product helps sell itself, and many customers find Zendesk rather than the other way around.  As companies wake up the fact that they need to be everywhere their customers are and put customers first, we believe Zendesk has the opportunity to continue to rapidly sign its next 20,000 customers and beyond.  Every company has customers, so Zendesk has a chance to sign millions of customers as it changes the world of customer service.
  • Team Team Team.  Mikkel is an inspiring leader with true product vision.  He has also built a terrific team around him.  As examples: we’ve worked with Alan Black, Zendesk’s CFO, before and have a tremendous respect for his capability and we’ve followed Zack Urlocker, COO, during his MySQL days and his reputation as one of the top enterprise technology go-to-market executives is well earned.

We believe Zendesk has all the ingredients to have a very successful future and we’re thrilled to be a part of it!

Leave a Reply