Yesterday Nitro, perhaps Australia’s leading document productivity company announced it has raised USD$15 million dollars in funding from US based venture capital firm, Battery Ventures. This brings the total amount of capital raised to USD$21.6 million, after a USD$6.6 million Series A led by Australia’s Starfish Ventures.
The Series B round will be used to accelerate growth of the company, with a particular focus on international expansion. At the moment, Nitro claims it is on track to deliver USD$30 million in revenue this year and has been doubling its revenue every two years for the past five years. With nine years of profitability backing it up, Nitro has presented itself as a very real competitor to many applications in the Adobe suite, most notably Acrobat – where Nitro competes with its Nitro Pro product.
The other main product the company has is Nitro Cloud, which enables document sharing, signing, and collaboration on any device. This is a space that has many competitors – the most prominent is Docusign, which is valued at USD$1.6 billion after a recent investment round that Australian telecommunications company Telstra was a part of, along with Japan’s telecommunication giant NTT and Samsung. These companies joined existing big company investors that already own considerable stakes in Docusign such as Google, SAP and VISA.
To be fair, when it comes to UI and UX, the Nitro Cloud service, is personally more appealing – but one can not deny that in terms of competition, that is some serious muscle to be up against.
That is why choosing to align himself with a firm such as Battery Ventures, widely considered a top ten US Venture Capital firm, is an extremely well thought out strategic decision on behalf of Nitro founder, Sam Chandler.
Chandler has been quite vocal within Australia’s technology space over the last 12 months – especially on the topic of late stage funding. Earlier this year, Startup Daily Editor, Tasnuva Bindi interviewed Chandler around the topic as part of her article Does Australia’s startup ecosystem even need late stage capital right now? – Chandler expressed both in this article as well as an op-ed in the Sydney Morning Herald, some strong views around Australia needing to rethink the way it goes about looking at Series A, B and C stage capital.
He admits in his article, that Nitro is “one of just a handful of lucky companies that are Aussie-backed” and that there just “aren’t enough other similar stories”. Chandler’s frustration is valid and certainly admirable.
What he believes Australia needs, however, is unattainable at the moment – though realisable in another five or so years. Why? For one, because we can’t build something at the top without having a solid foundation first. Silicon Valley, as we know it today, has been 60-or-so-years in the making. The same chronological events would need to occur in the same order for us to be able to have a startup ecosystem as strong and vibrant as the Valley.
Arguably, we only started building infrastructure about six years ago when Pollenizer was launched.
Then again, it’s not necessarily about replicating the Valley, but the strength of its support arms, which requires pulling our own weights.
Chandler says, “We need to take all the good stuff from Silicon Valley and repurpose it locally. While there are a lot of cities aspiring to become Silicon Valley, very few have a genuine shot at replicating the magic of the Valley – and Australia is one of them.”
Nitro’s Director of Operations, Gina O’Reilly, echoes a similar view: “We need to create an ecosystem of our own. We can take the good from other environments like Silicon Valley, but we have to create our own flavour of it.”
Chandler reiterated this point again, as he told Startup Daily that the US was “the only place we could raise $15m with the potential to raise tens of millions more if we ever wanted to.”
“If we want to go really big, US VCs run much bigger funds than anywhere else in the world, and are more experienced at later stage investing where that operational expertise really helps. When it comes to expansion, the majority of our customers today are in North America and Europe, and that is where we are growing the fastest in terms of new employees.”
The company is also looking to expand into Asia, a market that’s in past been often overlooked by Australian founders.
“Our Melbourne office will continue to expand, even if not at the same rate as San Francisco or Dublin. We have a very special connection to Melbourne as it was where we were founded, and home to many of us, including several members of the current leadership team. As we look to grow our presence in Asia in the next few years, we can see Melbourne becoming a hub for the broader Asian region,” said Chandler.
“While we haven’t done much in Asia yet, we expect to see more revenue there in years to come. We are Lenovo’s PDF partner, and Nitro Pro comes preloaded on Lenovo PCs all over the world, and of course Lenovo has dominant market share in key Asian markets like China and Japan, so it’s going to be a natural thing for us to expand there in time.”
Given this view, and more understandably the fact that Chandler has been quite candid about his goals around scaling to the next level fast, including ramping from a staff of 150 to at least double that over the next few years, Battery Ventures and adding General Partner of the firm, Michael Brown to the board is a perfect match for the company.
Brown expressed in a media statement that he was excited about what was to come in regards to Nitro’s services: “Every business deals with documents and knows the pain points in effectively sharing them and using them to collaborate with others.”
“Both offline and online, Nitro is helping to solve these universal problems. It’s exciting to think that we’ve only just scratched the surface of this significant market opportunity and Battery is delighted to partner with the Nitro team to deliver on the company’s vision of bringing smarter documents to everyone.”
Brown, who is based out of Boston, specialises in investments across the financial services, enterprise software and tech-enabled business services verticals. Given that Chandler is flirting with the idea of a possible IPO on the US Stock Exchange, Brown is going to be a critical component in Nitro moving forward and being able to do that.
Brown has been key to other tech IP’s and acquisitions such as that of Exact Target (NYSE: ET, acquired by Salesforce.com) and Q2ebanking (NYSE: QTWO) to name a couple. He was also actively involved in Battery Ventures investment in a startup called Neolane, a conversational, campaign marketing technology that like Nitro played in a similar space to an arm of (and was eventually acquired by) Adobe.
With over 490,000 customers in over 200 countries already, the next five years are set to be big ones at Nitro HQ. The company is also looking to expand to Asia.
Featured image: Sam Chandler | Source: Business First Magazine