There are a lot that would like you to believe that you can only be successful if you are in the silicon valley. While there are undeniably huge successes there, more and more Asia is innovating and raising to the level of their American counterpart. Today, a Singaporean CPaaS company, “WaveCell” announced a successful Series B. Let’s see what we can learn from them.
For most of you, readers of this blog, WaveCell is not unknown. You can read more about them in one previous post.
What is difficult in the world of CPaaS, is to draw comparison between all of the actors. They are at different stages, they have different offer, address different markets, and so on and so forth. It is tempting for some CEOs to compare their company with the most successful ones, say Twillio (even though their share value is but a fraction of what it was at IPO), or Nexmo to lure investors in. It is of course a double edge sword. Twilio, and pre-acquisition Nexmo where growing both in revenue and in size by three digits % year to year. Comparing oneself to them, is committing to the same results, if one want to pass the due diligence stage.
What about WaveCell?
According to their press release, “In the past year, Wavecell has significantly increased its enterprise customer base, by over 300%” . This needs to be put in context. At CoSMo, we grew 1,000% over the past 6 months …… by growing from 1 to 10 employees 🙂 Obviously, our growth is not reproducible nor sustainable.
In the case of WaveCell, they had been around for quite some time now, and achieved a 1.6M series A roughly a year and a half ago, so we are speaking about sustainable growth. The metric used, paying enterprise customer, show also a different focus than other platforms, that might be going after individual developers, and/or would report the number of users (including the ones who don’t pay).
What is very interesting from this announcement also, is the fact that industrial players are part of the round. The ASEAN telco market is quite new, and the telco operators quite daring to make a difference, without the weight of existing infrastructures.There is no surprise that all that lead to an oversubscription to their round.
While it could be perceived as a good thing by other local players, it is unlikely to transform into funding opportunity for any other platform in ASEAN. As explained before, the platform game is a winner-takes-all game. Having an already successful Platform locally, plus the big names coming in (tokbox, twilio), is like being too close to a black hole when you’re a small star: a slow but inevitable death.
Interestingly enough, with the huge appetite for Comms in Asia, as illustrated by the recent entry of CafeX through the Japanese market, and the imminent installation of a team of around 15 employees in Singapore, adding to existing Nexmo and Tokbox’s employees, the ecosystem is otherwise pretty weak, with only WaveCell successfully raising money.
From my point of view, it shows two things:
- I think it demonstrates a leadership and a vision, that might lacking in other locals vendors. You did not see WaveCell write a PR every time they acquire a single new customer.
- The choice of starting from telephony APIs and growing then into WebRTC later, a choice shared by a lot of successful companies so far(twilio, nexmo, tropo, ….), is apparently the right choice. SMS and telephony audio are generating enough money for all the businesses above to be profitable (if they wanted to), while there is but a little money to be made on Media over IP (as a platform) in general. Tokbox, however successful and growing, is , AFAIK still losing money. While it’s fine for Amazon to lose money, or fine for a subsidiary of a telco , it s not sustainable for a start-up, especially if you have to compete with big brothers like Tokbox or Appear.in that do not have to generate revenues.
After the acquisition of Nexmo (whose CTO is french and whose CEO attended university in France), and the recent announcement of a 63M funding of Symphony (whose CEO is french), this is yet another successful French lead company around, hopefully meaning more wine and cheese during meetings.
In conclusion: congratulation to WaveCell, whose team has shown good vision and executed great so far. You’re proving us that it is possible for a CPaaS to be successful in Singapore given the right leadership and right engineering.
For the rest of us in Singapore or even ASEAN, let’s hope to have either a different business model, or (however unlikely) a billionaire as a founder willing to support his/her business into an excruciatingly slow spiral down to irrelevance.
- CoSMo does not have any past or ongoing contractual relation with WaveCell or any of its affiliates.
- CoSMo management involves shareholders of Temasys Communications and as such has financial incentives to represent Temasys Communications in the best possible way.