Original Article on AlleyWatch
From the first written letters all the way to Alexander Graham Bell’s telephone, communication has always been around to make life easier. In our digital age this is not hard to see, but sometimes we are content with less effective modes of communication. Cloud9 Technologies is your daily reminder that you are communicating across your workforce as efficiently as possible. Their affordable and clear cloud communication platform can save you time and maybe even a few deals.
AlleyWatch got in touch with the president, Greg Kenepp, and spoke about workplace communication and about the company’s most recent round of funding.
Who were your investors and how much did you raise?
We received Series A funding from J.P. Morgan, ICAP, and Barclays. A few additional investors have also requested participation in this round, so we will announce the funding amount when it is finalized.
Tell us about your product or service.
Cloud9 is a cloud communications service provider that delivers high-performance voice and collaboration services for financial firms and institutional traders. We connect counterparties across all asset classes with an easy-to-use platform that eliminates costly infrastructure, features end-to-end security and encryption, and is fully compliant with the latest call recording and retention mandates.
Cloud9 is currently used by more than 2,000 traders at 350 firms across 21 countries.
What inspired you to start the company?
The co-founders of the company, including CEO, Jerry Starr; Chief Product Officer, Steve Kammerer; and CTO, Leo Papadopoulos, saw a clear need for a better communication solution in the trader voice space. Turrets, the legacy trader voice system, are a 40+ year old technology that lack a great deal of the functionality needed for a modern working environment. Workers are mobile, and teams, as well as business partners, are often geographically dispersed – businesses need to be able to effectively communicate and collaborate anywhere, at any time, in real-time.
With their knowledge of the industry, cloud services, and technology like WebRTC, they knew they could create a revolutionary solution that would be enterprise-ready, secure, mobile, and allow users to make connections in the industry.
How is it different?
Cloud9 is a truly disruptive technology compared to the legacy trader voice systems (turrets) that have become the status quo on trading floors.
Cloud9 offers a communications solution that is up to 50% more affordable, has superior voice quality, and can be used anywhere there is an internet connection – all without compromising security or compliance requirements.
We also offer the Cloud9 Community, a directory that gives you the opportunity to make quick, easy connections with fellow users and expand business. We’ve had customers tell us that they were able to expand the number of trading parties available to them using our community, which is certainly something that cannot be done with a traditional turret.
What market you are targeting and how big is it?
We’re currently targeting the financial services industry, and even more specifically, institutional traders. There are 220,000 institutional traders and 2,500 trading floors globally.
What’s your business model?
We have a monthly, subscription-based model. Since our service requires zero hardware, it can be easily and inexpensively deployed across a business and managed by existing IT teams. There is no additional cost for scaling up or down based on business needs.
Tell us about the experience of the founders before creating Cloud9. Did this make a difference?
We have all worked together for many years in the industry and have been through numerous rounds of funding for previous companies, but something about this product and this opportunity just felt special. We knew we were creating a product that not only would change the way the financial services industry operates, but could also provide a foundation for changing how the world communicates. I knew immediately that I had to be a part of it.
What was the funding process like?
Our founders came from the industry, and we had skin in the game in terms of personal investment of money and time. We were also able to build a network of users quickly.
Our investors trusted us because we are also looking to create a disruptive technology and scale the company, we’re not about landing on magazine covers or creating a lifestyle around what we’re doing. We just want to make good products, and build a great company.
What are the biggest challenges that you faced while raising capital?
Patience is the biggest challenge any company is faced with during a capital raise. Even if you have the right investors lined up, it takes time to get through all of the details and get everything closed out.
What factors about your business led your investors to write the check?
Our investors are actually some of our biggest customers – they have tried our service and experienced the benefits firsthand on their balance sheets and have seen the positive impact on their traders’ workflow. ICAP is already using our service within its energy trading teams and J.P. Morgan will be implementing our solution across their trading desks globally. We’ve had a great collaborative relationship with Barclays as we develop the product for their unique needs.
In addition, our investors highly trust the expertise of our leadership team and have a great deal of confidence that we are building a team and a product that will truly revolutionize the way communications is thought about in the industry.
What are the milestones you plan to achieve in the next six months?
In the coming months we’ll be rolling out a new product that will expand our offerings for the financial services community. We are also looking at establishing a presence in Asia as well as in Latin America.
We will be opening an additional sales and support office in Singapore in the coming weeks to help serve their robust financial services market.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
The most important thing any company can do is focus in building their business, and the rest will come. The worst thing you can do is chase an exit, or constantly react to your competitors.
Where do you see the company going now over the near term?
Over the near term we are focusing on expanding our company internally and building a world-class team to help support the Cloud9 service as well as create and innovate for the future.
Where is your favorite bar in the city for an after work drink?
Dear Irving in Gramercy.