Open-Xchange Raises $20M, Turning the Browser into the Office Hub

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Web-based communication, collaboration and office productivity software suite provider Open-Xchange has secured $20 million in Series C funding to grow its cloud office suite. United Internet, Josef Lamberti, and existing shareholders have made the investment to support further growth of the company.

The company’s roots are in providing an open email platform to service providers, but it has long expanded its offerings to become a platform for all things office in the cloud. It has been adding and developing open office productivity applications to its arsenal. The additional funds will support the company’s growth through investments into software development.

The company acquired much of the talent behind OpenOffice, an open source competitor to Microsoft’s Office Suite. It has been building out web-based versions of these apps launching OX Documents, a cloud based office productivity suite in March. The funding will help further these developments. Part of the proceeds will be used for a secondary transaction.

Major Presence in Hosting

“What makes this story a little unique is that you rarely see European companies get this kind of money,” said Rafael Laguna, CEO of Open-Xchange. The company touts many of the biggest hosting companies as its customers. It provides e-mail, collaboration and office productivity software suites to many of the top providers who in turn use it as a platform for their customers. “Hosting providers are using us as an integration tool,” said Laguna. The company is also picking customers among cable companies and telecoms, who in turn expose millions of users to Open-Xchange, according to Laguna.

Open-Xchange is a good example of how the office is shifting over to the cloud to enable distributed, mobile workforces.

“OX is the pioneer in making collaboration and productivity software accessible to anyone with a browser,” said Laguna. “As we aim to power ruthlessly open cloud solutions for the mobile web age, we’re encouraged by the validation in our client base, business model and global business expertise that this backing signifies. This addition of expertise to our board is critical as we expand our product offering during a time of great disruption in cloud-computing, and we’re thrilled to have investors who share our vision – to transform how people work.”

The company hit 80 million users this year and expects to hit the 100 million mark by next year. “We’re still growing at 50% every year,” said Laguna. “We’re around 100 people now. We’ve started OX documents, in addition to the major update to our core product, called app suite launched earlier this year. We went out and said we need a few more dollars.”

Backing from 1&1 Veteran

Dr. Oliver Mauss will join the Open-Xchange supervisory board together with Hermann-Josef Lamberti. Mauss is well known in the hosting industry for his time at the helm of 1&1 Internet, before becoming CEO of United Internet Ventures AG.

“This is an extremely exciting investment for us,” said Mauss. “Having been a customer of Open-Xchange for many years, we have seen the company evolve from a small vendor to a significant player in the cloud market. Open-Xchange´s vision of becoming the web desktop for cloud services makes this one of the most exciting software investment opportunities.

“The investment will enable Open-Xchange to expand software development, professional services and international business development, which will hugely benefit all customers and partners,” Mauss continued. “We also understand that Open-Xchange’s customer-base includes other well-known cloud service providers from all across the globe, which stand to benefit from this investment. For us though there was never a doubt that this was the right investment to make – we’re thrilled to be working with such an innovative company.”

eCAPITAL entrepreneurial Partners AG led the negotiations with the new investors.“As longstanding backers of Open-Xchange, we highly appreciate the investments by United Internet and Mr. Lamberti, said Dr. Paul-Josef Patt, CEO of eCAPITAL entrepreneurial Partners AG. “The additional capital, board expertise and network will provide strong support to the Open-Xchange team as they strive to implement their vision of a superior cloud-based communication and productivity offering.”

About the Author

Jason Verge is an Editor/Industry Analyst on the Data Center Knowledge team with a strong background in the data center and Web hosting industries. In the past he’s covered all things Internet Infrastructure, including cloud (IaaS, PaaS and SaaS), mass market hosting, managed hosting, enterprise IT spending trends and M&A. He writes about a range of topics at DCK, with an emphasis on cloud hosting.

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