Egnyte, the enterprise content platform provider, raised $75 million, marking the first time it sought funding in five years, as it aims to pick up the pace of growth.
The late-stage investment round came from Goldman Sachs and will be used to offer its content platform around the world. Egnyte launched in 2007, helping companies transition to the cloud by replacing file servers, enhancing content management systems and protecting the content of its customers. It has more than 14,000 clients including BuzzFeed, Nasdaq, Red Bull, and Arista. The company has been cash flow positive since 2016 and has more than eight quarters of positive growth.
Exciting for its investors including Goldman Sachs is what it pegs the market opportunity at: $400 billion. That’s the money going to legacy content platforms which could be Egnyte’s if the company's forecasts prove true. "We are excited about the new investment from Goldman Sachs and see it as a vote of confidence in our strategy and what we’ve been able to accomplish to this point,” said Vineet Jain, CEO and co-founder of Egnyte when announcing the investment. “Moving forward, with the tremendous market opportunity in front of us, this investment will allow us to focus on the long-term goals for our business – increasing our global presence, expanding our product footprint, and delivering the best customer experience in the industry." Egnyte’s total funding is now at $132.5 million.
Egnyte Sets Its Sights On An IPO
In addition to providing the $75 million in funding, Goldman Sachs vice president Holger Staude will join the board. This is expected to be the last round of funding before the company launches an initial public offering, Egnyte Chief Executive Jain told Fortune in a recent interview. He declined to say when an IPO would happen. If Egnyte does decide to go public it will be joining a growing list of SaaS companies that are tapping the public markets. This month alone Elastic and Anaplan launched IPOs, with both stocks surging. With SaaS companies possessing recurring revenue and with companies increasingly moving to the cloud, the market has been a hotbed of investments.
Egnyte plans to use the funding to beef up its customer support staff. Keeping a staff of good customer service reps is key for cloud services companies. Competition is fierce with rivals constantly competing for business. Retaining customers once their subscription is up can be tricky. The better the customer service team and the more they interact with existing customers, the better the loyalty, is the school of thinking. Not to mention the more you interact with customers the more opportunities you have to sell them other services. Egnyte targets its call centers in parts of the country where the cost of living is less to save money on employment expenses.