Quirky Contactual raises $9 million more -- keeps us smiling
The great thing about Contactual
is that it cracks us up every time we hear from them. The latest is they have raised $9 million more in cash in a round led by Leapfrog Ventures.
The San Mateo Web-hosted call center application helps companies manage all kinds of calls. We wrote about the company when it restarted a year and a half ago and changed its name from White Pajama.
This time we are amused by the reference in the story in VentureWire (sorry, no link this morning) to how the company has "managed to land 150 customers." In our story from a year and a half ago, you will see that the company had landed 200 customers back then -- so it has managed to lose customers, remain in the red, and still raise $9 million! (We don't mean to slam them here; after all, it is the impudence of founder Mansour Salame that makes him so endearing. Also, VoIP is transforming the call center industry, and a start-up adapting to that trend has a fighting chance.)
Last time, it was when Salame told us about how he'd scooped up the company's assets for $100,000 after the Internet bubble burst, after VCs had poured in $40 million and gone home frustrated (they aren't talking with Salame, so granted it is no laughing matter for them). And then there's the story about how the company was originally named White Pajama: Salame was disgusted by a colleague who had showed up to a critical partnership meeting in an embarrasingly loose and billowing white linen suit. They managed to win the partnership, despite the suit, so Salame pledged to name the company White Pajama.
Related link: Our post from when Don Lucas invested.
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You've been sold! Any reactions?
The new owner, Dean Singleton, said he wants to invest in the online operations, which is a good sign. Stay tuned on SiliconBeat. We've working on our plans.
Colorful or not, this company is executing well. I personally did a bunch of the customer references and I have never before DD'd a company that came up with 100% and positives from customers, and we picked the customers to check. And Contactual is profitable. All Series A deals should look so colorful -- the color is green.
Peter, VentureWire cites the company saying it "was approaching profitability before the financing," meaning still technically in the red. And your partner, Pete Sinclair, seemed to suggest profitability would be delayed still further because the financing will encourage the company to spend more for growth. I guess I got that wrong?
So, Peter Rip checks out customer references and actually takes them *seriously* - enough to do an investment? Come on - I've never met a real VC who believes so-called "customers"! Everyone knows those calls are too easy to set up.
His defense of this investment actually is more troubling than the investment itself. He should have talked "market leader" or "unfair advantage". Yes, those are vague terms too, but you can't pin it down as easily.
If you're going to do a spin job, you'd better have somebody else's reputation on the line along with your own. Just money isn't enough.
We Contactual guys may be quirky, Matt, but our customers, partners and investors see that we're spot-on in terms of the
contact center market. Since you last wrote about us 18 months ago, we
have more than doubled revenues, we're cash-positive, and we're up from 200
provisioned tenants to 500. (Sorry about the confusion the VentureWire article might have caused. The 500 we stated in our news release is
correct.) As you said in your post, we're in the right space with
VoIP. Our investors and customers believe in us. Life is good.