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Seattle-based Zipwhip gets $9 million from Microsoft for its tech that lets you SMS via landlines

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Zipwhip, a Seattle based cloud texting provider that lets people use its platform to communicate between mobile and landlines through the medium of SMS, has raised around $9 million in funding from a group of investors that also included Microsoft Ventures. The company has raised this sum as part of its Series B round.

What is the major difference in the modes of communications offered by a landline and a mobile device? The answer is pretty obvious. While the latter offers you the facility to communicate through either voice or text, the former only supports voice. So, whether it is communicating between two landlines, or communication between a landline and a mobile device, your options are pretty limited.

While this wouldn’t be of much concern to you if we talking about casual communication between friends and families, many businesses — indeed, a majority of them — offer consumers landline or toll free numbers. So, if a customer is unable or unwilling to communicate over voice, what is he to do? This is exactly where Zipwhip comes in. The company’s cloud platform lets users send messages to companies, even on their landlines and toll-free numbers.

The company has been in operation since 2007, however, with increasing focus on facilitating communication between consumers and businesses, its platform has started receiving significantly more attention. The company said that it was witnessing an annual growth of 356% in annual recurring revenue, with messaging traffic volume up by a staggering 300%. Those are certainly impressive statistics but, considering the transition in today’s world, where we are increasingly preferring to conduct our communications over text,  Zipwhip has risen in importance.

It has managed to raise a whole bevy of customers who are rely upon it to connect to their own customers. Examples of the type of companies that are using Zipwhip include banks, staffing companies, insurance agencies, car dealerships, title companies, credit unions and so on. Zipwhip’s USP lies in the fact that it is able to harness the existing infrastructure of the companies and is able to let customers who feel more comfortable interacting through text, do so.

And make no mistake, there are a whole lot of users of want to respond through messages. According to Zipwhip, users send over 150 million text messages to landlines everyday. However, owing to the absence of any system that can actually capture and display them to the landline owners, they might as well be texting Santa Clause.

Zipwhip provides companies with an interface that is able to receive and display these text messages. The company creates a filter between the customer mobile and the company landline. Whenever a user sends a text to a number associated with, say a bank, Zipwhip grabs it, pushes it to the interface it has created, and lets the bank respond in kind using the interface.

The idea is gaining traction in the US and is attracting investments as well. Zipwhip had already raised $8 million in its previous round of funding, and the latest round b takes its total to above $17 million. It uses a subscription based model that starts from $20 per month and goes all the way upto $100 and above. The company claims to have already enabled over 78 million landlines.

Speaking on the topic, Leo de Luna, Managing Director at Microsoft Ventures said,

Zipwhip has unlocked an easy, intuitive way for customers to communicate with businesses via text. We are excited to support Zipwhip as the company expands its product offering, and we are aligned in our pursuit to ensure people have technology that is seamless to use.

Considering that Heywire, one of Zipwhip’s largest competitors that operates in the same domain, has been acquired by Salesforce, Microsoft’s investment in Zipwhip certainly makes sense.

Meanwhile. Zipwhip is already looking to the future. The company is hoping to get into other sectors as well. For example, it hopes to make its channel more secure so that it could eventually also be used for conducting transactions.

As per co-founder and CMO John Larson,

We are working on [ways] to support the equivalent of SSL certificates, but for business phone numbers, so that you as a consumer know you’re texting with a legit business. We see that being a huge opportunity, and a natural next step in driving payment transactions over text messaging in the U.S., just like WeChat did in China. They’re now doing over $500 billion per year in transactions over messaging.

Ambitious plans certainly, and ones that make sense as well. Smartphones are certainly dominant however, landlines are pretty significant as far as businesses are concerned, mainly because they allow you to easily have multiple lines with the same number. And, the cable based landline system often touted to be more reliable than mobile. By leveraging its cloud based platform to make landlines more useful, Zipwhip is making the best of an already existing and highly under used market.

A bibliophile and a business enthusiast.

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