Cloud computing provider SingleHop announced on Wednesday that it has completed a $27.5 million funding round led by Battery Ventures. With the financing, Battery’s Dave Tabors and Morad Elhafed will be joining co-founders Dan Ushman and Zak Boca on the SingleHop board of directors.
This round of funding comes less than a week after SingleHop added more automated features to its Customer Bill of Rights, an initiative to improve its SLA by publicly posting its internal timing standards on everything from hardware replacements to server deployment.
SingleHop has built itself on unique, proprietary solutions. The LEAP3 control panel, released in November 2011, is completely proprietary, and SingleHop recently released its rewritten Tandem reseller white-label control panel. As many web hosts use third-party solutions for control panels, this offering is different, and while proprietary solutions may be the kiss of death for some web hosting companies, SingleHop has executed its technology successfully. Last year, SingleHop posted $22 million in revenues, a 75 percent increase year over year, and ranked the 25th fastest growing business in 2011 by Inc. Magazine.
“We’re software-focused, it’s given us a huge competitive advantage in the business, so we really want to continue, and Battery wants us to continue, developing unique technology, and building on to our proprietary platform. That’s really what made us stand out to Battery, and what makes us stand out to consumers, is the pervasive, deeply integrated automation at every level of our business,” SingleHop co-founder Dan Ushman says in a phone interview with the WHIR.
Currently, SingleHop has more than 10,000 servers in production, with three facilities in Chicago, and one to open in Phoenix soon.
“We’re not disclosing any of the specific plans for the funds themselves but what I can tell you is we see opportunity in expanding geographically, in Phoenix and beyond,” Ushman says. “That might mean opening additional facilities and additional locations around the world. We see a lot of opportunity in expanding our sales and marketing teams and activities, and investing further in development.”
According to the press release, Battery is the same venture capital firm behind Akamai, Bladelogic, Groupon and Marketo. It has been investing in technology companies for 30 years.
“It was a big goal of ours during the process to find an investment partner that believes in our vision for the company and to find one that would take a minority position so that Zak and I would retain control of the business,” Ushman says. “Battery really sees eye-to-eye with us on where the industry is going, where it stands, and the mega-trends going on involving cloud and outsourcing and IT infrastructure and all that. By retaining the majority control, we mitigate any risk, but with that said Battery has not had any intent to change how the business is run. The only difference quite frankly is now we have a regular board meeting that we have to attend.”
“SingleHop is well positioned given the rise in cloud computing and demand for outsourced IT services. With its automated technology platform, the company has carved out a unique position in the market,” Dave Tabors, Battery Ventures general partner said in a statement. “Customers are happy and sticking around, and that’s a direct result of the company’s business model, coupled with superior technology and a smart leadership team. We’re really looking forward to helping this company scale.”
Cheval Capital advised SingleHop on the transaction and American Chartered Bank participated in the round.
The upcoming WHIR magazine has a interview with co-founder Dan Ushman on SingleHop’s technology.
Talk back: How do you think SingleHop will use the funding? Do you think it’s proprietary technology has helped it become so successful? Let us know in the comments.