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Convo just raised its first significant round of funding as it attempts to build its own Facebook for the enterprise.

Convo is competing against giants in a space that includes Microsoft’s Yammer and Salesforce’s Chatter. But chief executive Faizan Buzdar told me that the company’s key differentiator is its focus on employee engagement.

Buzdar claims the average 60 person company is posting about 1,500 comments to its Convo employee network per day. Convo’s technology pinpoints the most valuable conversations and pushes them to the top. This information is presented in a similar style to Facebook’s newsfeed.

Buzdar believes that Convo is already inspiring significantly more engagement than the competition, with employees checking its service far more regularly. Convo’s customer base is growing quickly among both small businesses and large corporate companies.


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Rebecca Lynn, partner at Morgenthaler Ventures, said the investment team was “amazed at the level of engagement” from Convo’s early customers.

Buzdar claims the market is big enough for multiple players to succeed.

“There isn’t one network that everyone needs to be on, or even should be on,” said Buzdar. “Teams usually pick a product that is fine tuned to their needs.”

With the funding, Convo’s team will invest in building out its suite of mobile products, as Buzdar believes that people will continue to work on smartphone and tablet devices. The company will also invest in marketing, as one of the biggest challenges to growth is awareness.

“Enterprise apps do not spread the same way consumer ones do, and a lot of people end up not even knowing about a great product that is available for them,” said Buzdar

Convo’s $5 million series A marks the final investment from Morgenthaler’s ninth fund. According to a Morgenthaler spokesperson, this will be the final investment from that fund, with its focus on health IT, life sciences, and software as a service. Last week, Morgenthaler partners announced the formation of a new $175 million fund, dubbed Canvas, which will not invest in the life sciences.

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