New Zealand mobile software startup Spoke Phone has raised NZ$6.7 million ($6.44 million) in Series A funding, as it gears up to join the international playground alongside the likes of Google and Apple.
Spoke Phone has created a mobile operating system specifically for business users, allowing them to use their mobiles as they do their desktops, without feeling like they’re carrying work with them all the time.
Co-founder and chief Jason Kerr tells StartupSmart he sees a future in which people use the same phone handset for their personal and work lives — but with two different operating systems.
“There are very few companies that are still buying phones for their employees,” he says.
Also, although it sounds like it would do the opposite, the tech actually might be able to help people switch off from their work lives when they’re at home.
It provides “a guaranteed firewall that keeps your business life in your phone separate from your personal life”, Kerr claims.
“By 2025, 50% of the workforce is going to be mobile or remote,” he adds.
“We thought we would make their life a little better.”
This funding will be used for hiring, particularly to the Sydney-based sales team, and into the engineering and support teams in New Zealand.
At the same time, the business will be expanding its footprint in the US.
While Kerr is tight-lipped about the company’s financial growth metrics, he does allude to a quickly-expanding customer base.
The business started out selling to companies of three to five people, he says. Now, it’s routinely working with companies of 400 or more.
It has also just signed its first bank client, with a staff of about 4,000 people, for a proof-of-concept.
In both small business and enterprise, “people are starting to see this mobile-first future, and they’re starting to see ways in which they can use it”, Kerr says.
That said, when asked if Spoke Phone is on the front foot of a trend that’s about to go wild, the founder hesitates.
“When I was young and stupid I would have said yes,” he says.
“But, I still think we have a wee way to go as a culture to get rid of the dumb pieces of plastic we buy, put on our desks and fill up landfill with.”
A crowded space
This is the latest in a string of startup wins coming out of the New Zealand tech scene. Just last week, AI startup Soul Machines closed a $60 million Series B round, and last year we saw HR startup Joyous raise $3.8 million and tax startup Hnry bag $2 million.
Kerr puts Spoke Phone on the “relatively boring” side of Kiwi tech. But, there’s more and more innovation coming out of this side of the world, he says.
“It is much easier now to ideate and create than it ever has been, so there’s naturally more [innovation],” he explains.
When he started his first company, building text messaging solutions, he had to spend about $600,000 on tech and licences.
“Today, a developer can get started on Amazon for $20 and have more computing power and more database power,” he says.
“Ideation and environment go hand in hand I think.”
But, more innovation means more competition. And Spoke Phone especially is playing in a very busy mobile operating system space — Silicon Valley giants Apple and Google spring to mind.
“There is always competition, and there needs to be. A market of one is not a market,” Kerr says.
“Our job is to carve out a niche … and then execute on that niche.”
In this particular space, he says there are “literally 5,800 places you can buy a phone system”.
But, in terms of the strategy and execution, even the store process, “there’s only one who is building mobile-first, and that’s us”, he says.
Even Apple is “a closed garden”, he adds.
“Business communications is supposed to be an open garden, so I don’t see that threat from that angle.”
Build it and they will buy
Whether Spoke Phone can grow to be the next trillion-dollar tech company remains to be seen. Even Kerr himself — ever pragmatic — isn’t looking too far into the future.
“I try not to have pipe-dreams, I just try to execute,” he says.
“We have a two-year horizon right now … to try and tell you we’ve got anything beyond that would be a lie.”
In those two years, the co-founder will be focusing on reaching the next ‘meaningful inflection point’ — an annualised recurring revenue of $10 million.
Ultimately, Kerr doesn’t necessarily see it as an operating system that’s going to be on every phone in every office in the world. It’s not a consumer product, he says. It’s a tool to be used to make a specific part of people’s life a bit easier. That’s enough to build a successful business, he says.
“We have a belief that if you build a good product, people will buy it,” he explains.
“If we can build a company where people love working, build a product that people love using, all feed our kids along the way and maybe even save a little bit of the planet, good stuff.”