I am pleased to be able to share publicly the news that Socialtext has just closed a new round of financing. The total amount raised is approximately $4.5 million, and is a huge vote of confidence from our existing investors who are the participants in this round, including Draper Fisher Jurvetson, Omidyar Networks, and University Venture Fund. In the currently very challenging funding environment, we are truly fortunate to have such strong and supportive investors.
Socialtext has really been on a roll in the past few quarters! Since the end of September we have delivered a dramatically expanded platform of Enterprise 2.0 capabilities, adding social networking (Socialtext People) , customizable dashboards (based on the Google Gadgets standard), secure enterprise “Twitter-style” microblogging (Socialtext Signals), an Adobe AIR-based desktop client that integrates all aspects of our platform into a rich and engaging user experience (Socialtext Desktop), and are in beta with Socialcalc, the industry’s first social spreadsheet – all while extending and building on the world-class enterprise wiki and blog foundation that Socialtext has delivered for several years. Despite the severe economic downturn we have continued to drive year-over-year growth, we are seeing our new and existing customer sizes continue to increase, and the fantastic innovations that our product team has delivered are yielding faster and larger adoption rates than we’ve seen before.
It is with a heavy heart, though, that I’ve had to make the toughest decision every CEO makes – trimming our expenses to make sure we drive the company to profitability despite the uncertainty of the economic recession. Although the entire executive team had already taken pay cuts at the beginning of the year, we have just today taken the painful act of performing a small (6 employees) reduction in force. From a personal perspective, although in my career I’ve had to participate in executing layoffs on a much larger scale (I was at Cisco when we laid off 9000 people in one day), this is much harder on me because of the tightness of our team and the distributed family culture that we’ve worked so hard to build – and because of how much admiration and respect I have for every member of this team that I am so honored to be a part of. The whole company is committed to helping each of our affected employees through this difficult transition and we’re going to do everything we can to help them find their own great next thing. We also expect that it will not be too long before we are able to hire back into these affected positions, and these talented individuals will be our very first phone calls.
Our vision and commitment remains the same going forward. We believe that our approach to building and delivering Enterprise 2.0 software in an integrated user experience, with the economic and cost-of-ownership benefits of our SaaS model, our uniquely flexible deployment options (shared hosted, dedicated hosted, and on-premise SaaS appliance), and our strategic professional services, all combine position Socialtext uniquely in helping companies of all sizes tap into the true potential of their people, helping them work smarter, not just harder.
We’ll be provide much more frequent updates via this blog and on Twitter, where we’ll be sharing insights from customers, best practices on enterprise social software adoption, repeatable use case examples, and even more exciting product innovation that we have coming.