Intercom, Inc.

55 Second Street, Fourth Floor
San Francisco, California 94105
U.S.A.
Toll Free: (877) 595-5175
Web site: https://www.intercom.com

Private Company
Incorporated: 2011
Employees: 450
Sales: $100 million (2017 est.)
NAICS: 511210 Software Publishers

Intercom, Inc., maintains a customer communications platform to help mobile and web businesses connect to consumers for sales, marketing, and support purposes across the entire customer lifecycle. Intercom allows clients to send targeted email, in-app, and mobile push sales messages to both leads and current users. Its inbox product receives, assigns, monitors, and ends conversations with leads and users across websites, apps, email, and social media. In addition, Intercom assists clients in the development of public help centers and provides feedback tools to improve content. It serves more than 25,000 businesses and claims more than 100,000 monthly active users. Besides its San Francisco headquarters, Intercom maintains offices in Chicago; Dublin, Ireland; and London. Cofounder Eoghan McCabe serves as the CEO of the privately held company.

After graduating from Trinity College in Dublin in 2006 with a degree in computer science, McCabe started the software design consultancy Contrast, the name reflecting a desire to do things differently than other tech companies. He then met one of his future Intercom cofounders, Des Traynor, who was likeminded and joined the consultancy in 2008. Although McCabe had become a consultant to avoid having a boss, he quickly realized that he now had multiple bosses. Nevertheless, the consulting experience proved to be valuable, exposing him to successful start-ups for which Contrast developed key apps and products. Although McCabe and Traynor ultimately grew disenchanted with consulting, their passion for technology remained unchanged.

In 2007 McCabe and some friends paid a visit to Silicon Valley, where they emailed an invitation to go out for beers with Biz Stone, one of the founders of Twitter, which was in an early adoption phase. Convinced that Twitter was going to be a major success, McCabe decided to build a Twitter app. At the time, Twitter users received an email when a follower was added. McCabe decided to create a notification app to mark departures. The result was Quitter. Within days of its launch, the app was mentioned in the Wall Street Journal but was also vilified in many technology quarters.

Gradually, McCabe shifted his focus from Exceptional to commercializing Notification. In 2011 the consultancy was shut down, and Exceptional was sold to Rackspace, a managed cloud services company. During this period Exceptional's four partners (McCabe, Traynor, Ciaran Lee, and David Barrett) now considered how to use the proceeds of the company's sale to start a new business that would exploit Notification under a new name: Intercom. They regularly met in the Dublin coffee shop 3FE (Third Floor Espresso). Colin Harmon, the coffee shop owner, provided inspiration that would differentiate Intercom from the messenger services that were also being built by Facebook and other tech companies at the time.

McCabe noticed how Harmon greeted his regular customers by name and how that personal touch encouraged customers such as McCabe and his partners to make 3FE a gathering place. By contrast, typical customer relationship management solutions were impersonal; users were little more than an email account combination and a ticket number. “Imagine a coffee shop telling you that you need to read the FAQ before you order your coffee,” McCabe told VentureBeat's Eric Blattberg in January 2014.

In 2011 McCabe, Traynor, Lee, and Barrett incorporated Intercom, Inc. That same year McCabe traveled to Silicon Valley to raise seed money for the company. Although Notification software was already being used by thousands of customers, venture capitalists were skeptical about the potential of the product because it did not fit into a definable category at the time. Hence, it took McCabe several months to complete a seeding funding round. A turning point came when he reconnected with Biz Stone, who agreed to invest a small amount. His participation cracked the door open. McCabe had hoped to raise $1 million but was still only able to cobble together $500,000 from a group of 17 individuals. However, shortly after returning to Ireland, he received a call from an institutional investor who provided the $500,000 to reach the $1 million goal.

In January 2012 a beta version of the Intercom product was released. Rather than establish various subscription tiers, it was initially available at a flat rate of $50. It attracted both users and venture capitalists. A follow-on seed round in August 2012 raised $750,000 from Freestyle Capital of San Francisco and 500 Startups of Mountain View, California.

In mid-2012 Intercom emerged from beta. The product continued to evolve organically, as different functions were layered onto the platform, including new customer development, customer support, lifecycle marketing, and newsletter distribution. The platform also allowed for the sharing of data to keep disparate website teams on the same page regarding a customer. For example, filters allowed websites to divide customers into groups, such as users who have not yet tried a certain function. In this way, members of particular groups could be sent tailored messages. Moreover, the messages, whether sent by email or within an application, were accompanied by a name and picture of the sender and the capability of responding, in keeping the Intercom's focus on a more personal interface.

To support further growth, Intercom completed a Series A funding round in June 2013. Led by Social Capital of Palo Alto, California, the round raised $6 million. Also participating were the previous investor Freestyle Capital and David Sacks, the founder and CEO of Yammer. Most of the proceeds were invested in more product development, especially in mobile, but the company also expanded its marketing activities to move beyond early adopters and reliance on word-of-mouth recommendations.

By year-end 2013 Intercom employed 49 and boasted nearly 2,000 paying customers. One of them was Rackspace, which experienced an increase in user activation by 40 percent. By that point flat-rate pricing had given way to a model in which companies could use Intercom for free to receive a live view of their communities, but they were charged to send out messages. Every month, Intercom experienced double-digit sales growth and claimed that its revenues were now in the millions.

To invest further in product development, Intercom conducted a Series C funding round in August 2015, raising $35 million. It was led by ICONIQ Capital, a venture capital firm established by several Silicon Valley billionaires, including Facebook founder Mark Zuckerberg, Facebook COO Sheryl Sandberg, LinkedIn founder Reid Hoffman, and Twitter founder Jack Dorsey. Social Capital and Bessemer Venture participated as well.

By that point Intercom had demonstrated that it had a viable product, one that was being used by tens of thousands of internet businesses, both large and small, around the world. Its workforce had expanded to about 250 and it became clear that to maintain momentum, staffing levels would have to nearly double that amount over the next year, requiring additional cash. Thus, in April 2016 Intercom held a follow-on Series C round. Led by Index Ventures, LLP, a Swiss venture capital firm, the round raised $50 million, increasing the company's total funding at that stage to $116 million. ICONIQ Capital, Bessemer Venture, and Social Capital also participated in the round.

Two months after the round, Intercom received a validation of success in a different form. The fictional start-up company Pied Piper on the HBO comedy Silicon Valley was revealed in the background of a shot to be using Intercom. The cameo appearance may not have resulted in additional customers, but the moment was not lost on Intercom's founders. “Five years ago I was in Ireland, working out of a hipster coffee shop,” McCabe told Forbes's Alex Konrad in November 2016. “And now we're at this crazy inflection point where it's become obvious how unique our growth is.” By that stage, according to Konrad, Intercom was adding 600 paid customers and $1 million in new revenues every 10 days. To help accelerate sales, Intercom recruited L. B. Harvey, LinkedIn's director of business acquisition for North America, during the fall of 2016 to expand the sales team and attract larger customers. Also, Intercom established an office in Chicago.

In 2016 the company's sales improved to about $50 million from 17,000 paying customers, which included the International Business Machines Corporation, Shopify Inc., and Yahoo! Inc., and a combined customer base of more than 1 billion. Intercom also passed the 100,000 monthly active user threshold. In late 2016 it launched a new product, Educate, a helpdesk alternative application. Within two months Educate was generating $1.5 million in annual recurring revenue.

In 2017 Intercom expanded its senior management ranks by hiring Karen Peacock, a former senior vice president of Intuit, to serve as COO. Later in the year it released Operator, a technology that the company claimed could teach automated applications, commonly known as bots, to be more polite. Intercom-trained bots, for example, did not interrupt typing customers or suggest articles if a customer had already tried a self-service option. During the fall of 2017 Intercom added another new feature, Live Chat for Sales, a specialized Operator bot that prequalified sales leads gathered by a website or mobile app, thus alleviating a typical point of contention between marketing and sales teams.

In March 2018 Intercom completed a $125 million Series D funding round led by the Menlo Park–based Kleiner Perkins that valued Intercom at $1.3 billion. Two of Kleiner's partners had previously invested in Intercom while at other firms. Also participating in the round were Bessemer Venture and the newcomers Google Ventures and Vulcan Capital. The proceeds were earmarked for the expansion of Intercom's geographic footprint, especially targeting new customers in Europe and Asia. The following month Intercom released Intercom Messenger, a product that allowed clients to customize the apps offered to their customers. At launch, 12 apps were available to integrate, including Google and Shopify, but other off-the-shelf or in-house developed apps could be added as well. It was a new approach to business messenger software and one that Intercom hoped would result in even greater growth in the years ahead.

Ed Dinger

Freshworks Inc.; Salesforce.com , Inc.; Zendesk, Inc.