We reported last week that wireless email company, Visto, looked to be raising $50 million in new financing. Turns out, the amount is $51 million, according to this Dow Jones report. We’ll be talking with the company’s chief financial officer, Stephen Anderson tomorrow morning.
The investment was made mostly by insiders, and suggests the company’s value hasn’t increased that much. As expected, it was led by previous investor Oak Investment Partners, and included existing investors Draper Fisher Jurvetson, Meritech Capital Partners, DFJ ePlanet Ventures, Rustic Canyon Ventures, GKM and Blueprint Ventures. A new investor is DFJ Growth Fund, participated. Barry Schuler, a partner of that fund, and former AOL chief exec, will join the board.
We will ask the company tomorrow about how it plans to make money, now that it has sued just about everyone, from Research In Motion (maker of the Blackberry) to Microsoft, Seven and Good Technology.
The company tells Dow Jones that Visto has tripled its subscriber base in the past year — but it still is not profitable. The company has now raised $350 million over ten years. We will try to find more answers to why investors keep supporting this company.
Update: Chief Financial Officer Steve Anderson said the company is counting on a massive expansion in the mobile email market. He says we are at an “inflection point,” with three factors driving users to adopt wireless email: (1) More email enabled devices, such as the latest Nokia, Motorola and Samsung phones; (2) mobile carriers are pushing their own brands and offerings, which means more opportunities for Visto to cut deals; (3) the service is getting easier to use. In many cases, depending on its carrier relationships, Visto will come pre-installed on the phone, and the user will merely need to enter an email address and password to load Visto. Finally, Visto can get subscribers to pay an “attractive” price for these email services, he said.
He said Visto gets a fixed monthly fee per subscriber, but wouldn’t say how much that fee is. He said Visto’s plan is to sell its service by undercutting RIM and Good, which he said are serving executives at major companies. At the same time, Visto will go for medium or small sized corporate customers, which will differentiate Visto from Seven, which Anderson said is going for the low end of the market, and is focused more on individual consumers.
The Radicati Group predicts 120 million corporate email users by 2009, up from 6.5 million in 2005, he said. Analysts predict 167 million email enabled phones by 2009, up from 45 million last year, he added.