UK-based customer engagement software provider Genesys secured $580m on Monday from investors including Zoom, forming part of a significantly expanded portfolio for the video conferencing platform developer in 2021.
Salesforce led the round through corporate venturing subsidiary Salesforce Ventures at a $21bn valuation and was also joined by fellow enterprise software producer ServiceNow (through ServiceNow Ventures), BlackRock, D1 Capital Partners and an unnamed US-based mutual fund manager.
Genesys has developed a software platform which enables businesses to orchestrate their customer experience activities across multiple channels. The funding will support its international expansion.
Tony Bates, Genesys’s chairman and CEO, said: “Two years ago, we saw the challenge businesses faced in meeting the expectations of consumers and employees around digital experiences. We realised we had an opportunity to transform not only our company but the overall industry.
“We believe this fundraise, including raising from leading strategic investors, validates the achievements we have made to date and will accelerate our continuing efforts to expand and realise the vast experience-as-a-service market opportunity ahead.”
For Zoom, the deal represents its 12th investment this year, following the April launch of its $100m Zoom Apps Fund, which was set up to target investments in its own app ecosystem, including in developers of hardware, integrations, application programming interfaces and developer platforms.
As the popularity of Zoom’s product exploded during the covid-19 pandemic, it emerged as a heavyweight that began attracting startups creating products around its platform, in a similar way to those that have used the Salesforce platform on which to build their business.
With a strategy of making initial investment ranging between $250,000 and $2.5m in seed to series A stage, Zoom made the first deployments from the fund in August, backing companies like project management platform developer Hive, networking app provider Warmly and video call-recording app developer Fathom.
The company has also been ramping up its strategic investments. Just weeks after announcing the first Apps Fund investments, it injected $30m in video meeting device developer Neat in September at a $640m valuation.
The Neat investment followed the June 2021 purchase of $75m of stock in work management software developer Monday.com in a private placement ahead of the latter’s initial public offering. Salesforce Ventures bought an equal amount of Monday.com stock at the same time.
Genesys had most recently raised money in 2016, when it received $900m from private equity firm Hellman & Friedman at a valuation of $3.8bn in return for a “substantial equity stake” in the company.
Just as Zoom has been transformed by the pandemic, enterprise software itself has seen significant acceleration due to covid-19. According to a report from International Data Corporation (IDC), the size of the enterprise applications market grew 4.1% year on year in 2020 to revenues of $241bn.
Focus shifted sharply to digital resiliency and adaptability as more of the white-collar workforce went remote, bolstering underlying technological tailwinds running across multiple industries.
This has translated into a flood of capital into enterprise technology, as services like customer relationship management, information and data management, cybersecurity, application development and communications are needed across the board. Companies are increasingly choosing digitalisation, not least because they have realised the extent to which they can gain insights from their data and need the infrastructure to mine that information.
IDC projects revenues for enterprise tech to reach $334bn by 2025, with demand for public cloud-based enterprise applications to grow by a compound annual growth rate of 13.6% over the next five years.
