By Allan Maurer
MCLEAN, VA—Parature, which makes customer support software sold as a Web-based service, has doubled its size since taking on $13.5 million in venture capital last July.
It jumped from 40 to 80 employees and opened a San Francisco office. The company is working on a feature-enhanced version six of the program that evolved from live chat software the founders developed while still in school at Cornell University.
Parature CEO and co-founder Duke Chung, tells TechJournal South that timing played a part in Parature’s success. Founded in 2000, the company focused on offering online business support software as a service before it became as accepted as it is now.
While it met with some resistance from companies who preferred in-house solutions, Chung says, “We had good timing. It was a good idea for an open market.”
Competitors go after larger clients
Most online customer support software is more expensive and complex than many small to mid-sized businesses can afford or handle, he explains. But with new businesses of all sizes going online daily, there was a ready market for Parature’s less expensive, easy-to-deploy product. Today the company has 450 clients and serves more than six million users at companies.
Customers include The Weather Channel, AMD, Office Depot, and Florida State University, but also many smaller and mid-sized clients. Parature has a 98 percent renewal rate, outstanding for software as a service, which averages 68 percent. “Some of our customers say, ‘You can never take away our Parature,’” Chung notes.
After five years, the company saw an opportunity to enhance its product and ramp up sales by accepting venture backing from Vienna, Va.-based Valhalla Partners, and Menlo Park, Calif.-based Sierra Ventures.
“We think we have enough money for now,” says Chung. “We have a year and a half to two year plan to take us to profitability and then we’ll take additional money only for expansion or acquisition purposes. But we think we’ll be self-sufficient.”
Chung adds that the company’s major competitors, such as Texas-based BMC software, which has 15,000 customers and $1.49 billion in revenues, “have historically focused on much larger customers.”
A great place to work
The customer support space is about a billion dollar market and Chung says, “We’re going after a piece of it. We’re doing very well and think there’s a lot of opportunities.” He points out that customer support is one of those things companies tend to out source and with more and more small to mid-sized companies selling on the Web, the customer base is continually expanding.
“Larger companies like Amazon have the resources to build these resources themselves,” he says, “But there are a lot of companies that want to focus on their own business and outsource customer support to companies like Parature.”
One of the benefits to customers of selling software as a service, he says, “Is that when it comes time to upgrade, customers are all upgraded at the same time at no additional cost over the monthly subscription fee.”
Chung is recognized as one of the top up and coming entrepreneurs in the Northern Virginia region. In 2002, Washington Techway magazine named him as one of the area’s top under-30 technology executives. He was also selected to the 2002 MindShare Class, an exclusive, by invitation only program for CEOs of the most promising, high tech, start-up companies in the Greater Washington Metropolitan region.
His company has been recognized as one of the best places to work bin 2005 and 2006 by the Washington Business Journal. It’s no wonder. “We’re having fun,” he says.
Chung told an interviewer for another publication, “I am a real avid basketball player. We have a lot of great basketball players in the company. We have an event called ParaHoops every Wednesday. We have a gym and actually invite outside people to play.”
Parature offers a 30-day free trial of its software.
For more information see: www.parature.com
Allan Maurer can be reached at: allan@techjournalsouth.com
© 2007, TechJournal South. All rights reserved.
