technology

Intercom Hits $1 Billion-Plus Valuation With Backing of Kleiner Perkins’ Mary Meeker

Venture Capital firm leads $125 million funding round for business-to-customer messaging startup
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Intercom, a messaging startup that makes it easier for companies to sell things to customers, just sold a pricey stake in itself.

The company's latest funding round of $125 million, led by Mary Meeker of venture firm Kleiner Perkins Caufield & Byers, values Intercom at $1.275 billion. That brings it into the elite group of about 200 startups known as "unicorns," meaning their valuation is $1 billion or more.

The funding comes as messaging services in general continue to gain traction, often replacing email. Much as consumers use apps like Facebook Messenger and WeChat to communicate, and employees use services such as Slack, Intercom allows businesses to talk with customers in an informal and immediate way, typically right on their phones.

“One of the most demonstrable ways that the Internet is impacting commerce is that it is requiring businesses to be more customer-centric,’’ Meeker said. She was drawn to Intercom over competitors because it works in a broader set of situations and helps users handle customer interactions more consistently, she said.

Eoghan McCabe co-founded Intercom in 2011 after he and some colleagues at his previous Dublin-based startup, Exceptional, wished a tool like it existed while they were peddling services to software developers.  

“We wanted to fight transactional spamming, fake ways Internet companies interact with their customers," he said. A classic example: email messages addressed to “Dear Valued Customer’’ sent from accounts that don't accept replies.

Intercom says 500 million monthly messages went out on its service last year, up from about 250 million monthly a year earlier. Last year the company said its annual revenue under contract had hit $50 million, but declined to provide updated figures. Customers include e-commerce company Shopify Inc. and auctioneer Sotheby's.

Risks to the business include the possibility that a new technology may leapfrog messaging, or the ascendance of a competitor such as Drift, a conversational marketing platform backed by General Catalyst and Sequoia Capital.

Meeker is joining Intercom's board as an observer.  Two of her partners at Kleiner, Mamoon Hamid and Ilya Fushman, previously invested in Intercom while working at other firms.

Alphabet Inc.'s GV participated in the funding round. Existing investors include Bessemer Venture Partners, Index Ventures, and Slack founder Stewart Butterfield.

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