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At just over 4 years old and 500 customers, Thinking Phone Networks has taken its first venture capital, a $1.2 million equity financing from Boston investment bank Capstone Partners.
The financing is part of a planned $1.7 million round. President and CEO Steven Kokinos said Thinking Phone, a Cambridge-based enterprise software company, plans to use its new funds to increase sales staff and focus on sales execution. The company plans to expand coverage into new U.S. regional markets, he said. Capstone Partners president John Ferrara will take a board seat.
The funding comes after Thinking Phone bootstrapped itself to profitability, crossing the break-even point in 2009. Its history is all the more remarkable because the company is technically a telecom.
All of Thinking Phone’s applications include voice capabilities, and the company is a licensed voice carrier, officials said. Unlike Voice over Internet Protocol (VoIP) business application providers, Thinking Phone controls the actual data wire that goes into customer locations. In other words, if there’s a problem, they can send a truck.
“Applications and physical infrastructure don’t have to be siloed,” said Kokinos. Kokinos was previously a co-founder at BladeLogic Inc. and left the company to start Thinking Phone in late 2005 with CTO Derek Yoo, a former product manager at BladeLogic. Two years later, BladeLogic went public, raising $67 million, then sold in April 2008 for $800 million to BMC Software Inc.
Yoo and Kokinos also worked together at WebYes! LLC, which sold to Breakaway Solutions Inc. in 1999.
Kokinos said Thinking Phone took some of the lessons learned in developing internal business applications at BladeLogic, a communications software maker, to formulate a new business idea. The company’s applications tap into the telecom data it handles. For example, they track phone calls and text messages, meaning that employees using applications like customer-relationship-management (CRM) do not need to log customer contacts. It also provides an application programmer interface (API) to deploy the same capabilities into third-party software.
The company, which sells software as a service (SaaS) on a hosted, subscription model, generally targets Fortune 3,000 companies with large numbers of locations, Kokinos said. Its customers include Century21, Nationwide Insurance and Church & Dwight Co.
It currently has 40 employees, split mostly between its Cambridge headquarters and a Canadian engineering facility located in Ottawa. Kokinos declined to disclose revenue figures.
“We’ve been very efficient so far, and we grew 40 percent last year, and we expect to grow more quickly than that in 2010,” Kokinos said.
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