Tuesday, April 12, 2005
Webmail.us raises $400,000 in private funding
Webmail provides a variety of e-mail services to individuals and small and midsize companies.
The latest from The Ticker blog
Pat Matthews is a happy guy. His company, Webmail.us, just raised more than $400,000 in its first round of financing - all from private investors.
This comes on the heels of a 175 percent increase in annual revenue, hiring more than 15 new employees in the past 18 months, and signing up more than 5,000 customers.
Oh, and a move to new, larger offices just a few months ago - always a nice change.
Webmail provides a variety of e-mail services to individuals and small and midsized companies - it essentially runs a company's e-mail system, saving the cost of maintaining the hardware, software, spam and virus filters.
"We believe in the outsource model," said Matthews.
Others believe in that model as well.
Webmail first incorporated in 1999, then raised about $140,000 in seed capital over the next three years, mostly from friends and family. But once it proved itself, it was time to look for more funds to expand the business.
"We put together a business plan and a private placement memorandum," Matthews said, then began a yearlong process of pitching his product. He gave presentations in Roanoke and Blacksburg, but also looked outside the region.
"It was a lot of work," Matthews said. "There are not a lot of technology investors in Southwest Virginia. We had to work to find the needles in the haystack."
Alec Siegel, director of operations for MBA Management Group in Blacksburg, was one of those needles. He invested $20,000 of his own money after meeting Matthews and the Webmail team. (MBA provides some staffing for Matthews' company.)
"I've been around the block a few times," Siegel said. "I've seen successful companies and not-successful companies, and strong management teams and weak management teams. Sometimes I just get this gut feeling whether companies truly have the fire in the belly or not."
Webmail, he thought, had the fire.
"It just became a no-brainer for me," he explained. "Not that it's such a unique product, but I just think that it's such a big marketplace and they're so driven. You just kind of go with your gut feeling."
David Sabotta, vice president of federal market development for G3 Systems in Blacksburg, also put up $20,000 of his own money. He discovered Webmail after reading Matthews' blog, which includes Matthews' commentary on the company and his vision for it. Then Sabotta got to meet the company.
"Pat's got some great vision," Sabotta said. "I'm really impressed by his business model."
What impressed him even more, though, was that Webmail not only survived the dot-com bust, but actually grew while other companies were liquidating their assets. "That," he said, "marked a real accomplishment."
With the extra 400 grand from investors such as Siegel and Sabotta under his corporate belt, Matthews is looking to help his company grow. Not in any kind of takeover frenzy - he didn't survive the dot-com crash by thinking that way - but by improving and expanding Webmail's existing products.
Webmail can run the back end of a company's e-mail: the servers and software that send, receive and filter messages. It also supplies clients a Web-based front end so users can access their messages from anywhere - much as they can with Hotmail or Google's Gmail.
For starters, that Web-based client is what Matthews is looking to improve with new features and speedier operation.
"You can't wait five seconds for every e-mail to load," he said, but that's just what most Web clients make you do. He wants to create a fast client that can compete head-to-head with the likes of Microsoft Outlook - the ubiquitous, but expensive, platform in so many offices.
He also wants to do Outlook at least one better with the addition of an RSS aggregator - a tool for pulling in the latest information from a user's favorite Web sites. RSS aggregators have been growing in popularity with the rise of blogging, but many are not as simple to use as e-mail.
"What we're really doing is taking a technology that's relatively unknown but very powerful and making it work exactly like the most well-known technology in the marketplace, which is e-mail," Matthews said. "Everyone understands e-mail."