TECHNOLOGY | Jan. 17-23, 2014
By Stephen Nellis
Santa Barbara-based inbound call technology firm Invoca has raised $20 million from Accel Partners, bringing the company’s funds raised to date to $30.8 million.
Invoca’s technology lets companies generate unique phone numbers to insert into marketing campaigns, filter calls as they come in, and track and attribute any sales that result. Founded in 2008 and originally named RingRevenue, the company previously had raised $10.8 million from Los Angeles-based Upfront Ventures and Santa Barbara-based Rincon Ventures, which also joined in the latest round of funding.
CEO Jason Spievak said the company still has several million dollars in the bank but wanted to build on its rapid revenue expansion. Invoca ranked No. 1 on the Business Times’ list of Fastest-Growing Companies last year, with three-year revenue growth of 654.5 percent to $5.2 million at the end of 2012.
“We’re bringing on Fortune 1000 brands with rapid revenue growth and zero churn,” Spievak told the Business Times. “What that really means is jobs. I expect the company to double in size over the next year and a half.”
Invoca has about 75 employees now, and the company will open a Bay Area office in addition to expanding its Santa Barbara operations, Spievak said.
Big companies are now spending billions of dollars a year on software to minutely track and manage how they spend their marketing dollars. Invoca says it is the first software firm to let customers track incoming calls from clients with that level of detail, which can open up new insights that current marketing software can’t.
Spievak gave the example of a customer such as Liberty Mutual Insurance. That company might have a click-based Web ad. If a consumer clicks on the ad, starts filling out an application but then decides to call a customer service representative to complete the process, click-based systems alone erroneously would say that the ad was ineffective.
“The reality is, the consumer had questions because insurance is complicated and took out their phone and called a number on the website. With Invoca, you can see that you should be spending more on that lead rather than less. We close that loop,” Spievak said.
In a statement, Kobie Fuller, an Accel partner who will be joining Invoca’s board of directors with the investment, called Invoca “a category-defining business.”
“Despite the fact that their highest-value leads arrive through phone calls, [marketing executives] are routinely stymied by the call channel, assuming that it lacks the same measurement and optimization that other digital channels possess,” Fuller said in a statement. “Invoca is determined to change that mindset by offering the most effective solutions available to enterprise marketers in this channel.”
Spievak said the deal came about quickly. The company contacted a number of large venture capital firms in Silicon Valley, and Accel pounced on the deal. “We made the decision to go to market for capital in the first week of November,” Spievak said. “We ended up signing a term sheet with Accel before Thanksgiving. It was in some ways a preemptive move by them to provide us a term sheet before our other dialogues could progress much further.”
Invoca began life as RingRevenue, essentially offering to track calls like clicks for so-called performance marketing, in which users clicks are attributed back to the page that hosted the ad for a commission. It initially sold its software to all of the major performance advertising networks, asking for a cut of each commission.
But after a few years, the company changed its name — RingRevenue sounded too much like telemarketing or robo-calling — and its business model. It began selling its system directly to brands that would be buying advertising and charging a monthly subscription fee. It ended up helping, rather than alienating, the earlier advertising network customers.
“It has the effect of driving more high-value traffic for [networks and ad agencies]. We have networks pushing brands to us to become Invoca customers,” Spievak said.
For now, Invoca might have to look for more space. It took over a building on Chapala Street in Santa Barbara and undertook a makeover that included putting an Irish pub in the basement. That building is already getting full. “The engineers on the third floor are complaining they’re too far from the beer,” Spievak said. “We’ll have to see whether that makes its way into the strategic plan.”