Liz Gannes

Recent Posts by Liz Gannes

Enterprise Is So Hot Right Now: Zendesk Raises $60M for Customer Service (Video)

Zendesk, the online customer service platform, has raised $60 million in Series D funding.

The round includes a venture portion led by Redpoint Ventures, and $15 million in debt financing from Silicon Valley Bank.

Zendesk CEO Mikkel Svane

Alongside the funding, Zendesk is launching a complete rewrite of its service, as well as a new app platform.

Given its familiarity with customer service pitfalls, Zendesk is trying to avoid alienating users who don’t like the change. The company promises to keep its old version running indefinitely and give users the option to switch back and forth, said CEO Mikkel Svane in an interview Tuesday.

Some 20,000 companies use Zendesk for customer service, and the company plans to apply at least part of its new funding to expanding around the world.

Svane mentioned that it took him less than a week to land those tens of millions in funding. Other investors included Index Ventures, GGV Capital, Goldman Sachs, Charles River Ventures, Benchmark Capital and Matrix Partners.

Why were investors so raring to go? Svane said they had heard about Zendesk increasing its monthly recurring revenue by 500 percent since its last funding round, in November 2010.

Also, this notion of “enterprise 2.0” is pretty hot right now. Where people used to love talking about “the consumerization of enterprise” because consumer was sexy, now the emphasis seems to be more on the enterprise part.

I asked Svane whether he thought investors were flocking to enterprise because they liked the sound of paying customers, after all the problems ad-supported consumer tech businesses have been having as they try to enter the public markets.

Svane laughed it off and said that was just a storyline reporters like to tell. (I told him I’d bet that if he were Aaron Levie from Box, he would have said “Absolutely,” and run with it — and probably gotten some IPO innuendo in there, while he was at it.)

But no, Svane is a straight shooter, and an incredibly amiable one. See more in our video interview:

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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald