Everyone I know is on email but nobody loves it. Yet email is a repository of extremely valuable information -- including key documents, important communications, and records that could either save you from legal heartache -- or get you tossed in jail.
Despite the best efforts of software developers to replace email as a way to collaborate, its benefits -- ease of use and widespread adoption -- continue to outweigh its costs and risks -- including vulnerability to spam and viruses, clunky search capabilities, and legal risk.
In an October 19 interview with Mimecast CEO, Peter Bauer, I learned that since 2003, his company has been working to create an integrated solution to all the technical problems with email that has been built from the ground up to work well in cloud-based environments rather than what he called "legacy client server architectures."
In so doing, Mimecast is seeking to replace a raft of what Bauer calls, point solutions. These include "anti-virus, anti-spam, encryption, and data breach protection" among others, according to Bauer.
And though Mimecast began working on the problem in 2002, it was not until 2005 that companies started using it. Since then 6,000 companies have signed up for its solution -- 1.6 million users paying on average $45 per user per year. For example, in the UK, "70% of the top law firms" use its product.
Mimecast is targeting a huge market. The annual revenues of all those point products total $36 billion (400 million users who pay $90 per user per year). Microsoft (MSFT) Exchange has 80% of the email server market. But since Mimecast is charging half price and offers companies an integrated solution, it's gaining share -- growing at 50% in 2012 and likely 40% in 2013.
Bauer and his co-founder, CTO Neil Murray, had sold their companies to public acquirers prior to starting Mimecast so they had capital that they chose to invest in the company to keep it going during its leanest years.
It raised about $10 million from angel investors and after getting reference customers and generating revenue growth in 2009, Mimecast raised $21 million from venture capitalists -- then in September 2012, it landed a whopping $62 million round from Insight Venture Partners.
In 2011, Bauer moved from London to Boston to work out of Mimecast’s Waltham office, which opened in 2008 — placing it closer to being halfway between its European customers and its West Coast ones.
And it now has 350 people — 50% are based at Mimecast’s headquarters in the UK, 25% are in Waltham, Mass. and the other 25% are in South Africa and Australia. Mimecast opened another office in San Francisco and is looking to double its Waltham staff from "75 to over 150 in the next year."
Whether Mimecast goes public or not is likely a question of whether it gets to the size needed to attract public investors. But Bauer certainly wants to make it "IPO grade fitness in the next couple of years."
To that end, he is lucky that his fifteenth employee is Mimecast's CFO who had prior experience at a NASDAQ listed company. That experience would certainly prove useful were Mimecast to seek a public listing.
And not surprisingly, such an outcome would make Mimecast's investors happy and would provide Bauer with the capital to fund his next business venture.
