Clickatell scores $12M to rejuvenate texts with bulk messaging

E-mail, tweets, location-sniffing geofencing—the good old text message is still the way to go if you want to reach not just the technologically hip, but virtually every cellphone owner. Clickatell, the Redwood City, Calif.-based SMS gateway company has built its business around business-to-consumer text messages, and offers a way for businesses to send out text messages in bulk, for instance sharing discount offers, ads, or other notifications.

The company also provides solutions for carrying out financial transactions over mobile phones, and is coming up with new transaction services for developing countries.

And business is on the rise: Clickatell has just announced bringing in $12 million in a second round of funding, led by Sequoia Capital and new investor DAG Ventures. The new round makes the company’s total funding $21.5 million.

Up front, text messaging is like e-mail—boring, yet incredibly effective. Even though there are numerous options for mobile communication, the good old text message is still a surefire way to reach the masses. According to Clickatell, 9 out of 10 Americans can receive text messages, when, for instance, Twitter reaches only about a quarter of the population. And, in 2010, around 6.1 trillion text messages were sent globally. The astonishing number (that’s thousands of billions) also represents steady growth, as it is triple the amount of text messages that were sent in 2007.

Therefore, Clickatell aims to take advantage of the text message’s ubiquity and is going to use the new funding to hire more people (the company now employs around 120) develop its product, and expand in emerging markets. To better serve the domestic market, Clickatell is also launching a new, web-based SMS messaging package for small and medium U.S. businesses. Originally founded in South Africa in 2000, Clickatell has 13,000 enterprise, government and small and medium business customers and is profitable, bringing in “double-digit millions” in revenue.

[Photo credit: kiwanja]