- Francophone Africa and Europe can expect access to more African and African-American content through Afrostream. The two-year old startup led by Tonjé Bakang has been on a tear this year, finishing up at Y Combinator and landing funding from Troy Carter’s Cross Culture Ventures (have they finished raising their $50M fund?), Orange Digital Ventures, Ace & Company, and The Family. Yesterday, Afrostream announced a content deal with Viacom to stream BET France content and collaborate on developing content. Earlier this fall, the startup inked a content partnership with Sony. The startup wasn’t on my radar before, but I’ll definitely be keeping an eye out now.
- Atlanta’s technology scene continues to grow. Paul Judge and Allen Nance announced a $25M fund that will support hardware and data entrepreneurs in their Tech Square Labs. According to Urvaksh Karkaria, the partners have raised about half of the total fund size, including $2.5M they personally invested. Around $7M has gone into developing Tech Square Labs. These two are really digging in to help entrepreneurs “build something from nothing” as Judge likes to say.
- David Cummings’ post on customer acquisition versus product development has been on my mind the past few days. Always be closing!
The Dropifi team probably felt chills running through their bodies while watching Zendesk’s share price rise 49 percent on day one of its IPO on Thursday, and then reach a $1B market cap on its second day of trading on the New York Stock Exchange. Here’s why:
1. Big Sandbox – In its Form S-1 filing, Zendesk highlights International Data Corporation intel pointing to the customer relationship management market being $20.7B, as of 2012. Zendesk did $72M in revenue in 2013. Couple that with IDC’s projection that software as a service (SaaS) platforms will grow 10x faster than legacy platforms in a world with 76M small-to-medium sized businesses, and you get the picture. Zendesk has 42,000 customers. Dropifi has 8,000 customers. Dropifi has a lot of sand to work with to build its own castle.
2. Little Sibling Effect – I’m the oldest of my siblings and after breaking through many new seasons of life, I’ve watched my siblings do everything better than me. Dropifi has the same opportunity to watch Zendesk’s missteps and capitalize on the lessons learned. This will be critical in customer acquisition. With more than 8,000 customers, Dropifi is behind the 10,000 customers Zendesk had in its fourth year of operation.
In David Cummings’ post last night, he pointed to design as one of the big differentiators between the first and second generation SaaS companies. Dropifi may have some work to do to compete with Zendesk here. This has been a tough post to write because I want to pull out my yoga mat every time I pull up the Zendesk site.
The bottom line is that Dropifi has an opportunity to scale massively. After hearing David Osei, CEO of the company, speak at Harvard’s Africa Business Conference, the company certainly has the hunger to make this happen. More than 10 500Startups companies, which recently eclipsed the 500 mark, have been acquired. Dropifi is already the incubator’s first Africa-originated company. If Dropifi can avoid acquisition by Zendesk, Salesforce, or another player in the CRM space, perhaps we could see it be 500Startups’ first company to reach IPO-status.
What else? Do you think Dropifi has what it takes to compete with the likes of Zendesk?