Today, probably the most significant evolutionary milestone in technology, the birth of the smartphone, has prompted the mass migration of consumers away from desktop computers and onto their mobile devices.
As smartphones and tablets become an essential personal item, firms now have to deal with employees using their own devices in the office. The days of the company issued Blackberry are almost over and Alex Bausch, the founder of Dutch firm VeliQ BV, has positioned his company to take advantage of this secular shift.
VeliQ’s main product is a platform called MobiDM, which lets companies manage their employees’ mobile devices while also providing cloud services. Unlike competitors such as Air Watch, VeliQ offers its software as a paid subscription.
“The generation today wants to use the same device at work that they are using at home. Plus there is a trend towards ‘appification’. Rather than buying big software packages, users want to connect to service as they need them,” says Bausch.
Another way VeliQ differentiates itself is by targeting mid-tier companies instead of the world’s largest corporations. By being competitive on price and focusing on ease of use, Bausch hopes to dominate a market often overlooked by other mobile enterprise software providers.
But the software-as-a-service model, also known as SaaS, has its drawbacks when it comes to company valuation. According to Bausch, since VeliQ accounts for its sales as software leasing, it cannot book the full value of contracts up front. This weakens the balance sheet to the extent that the firm has found it difficult to find European banks willing to work with it.
To date, VeliQ has raised €2.5 million in 2011, plus another €8 to 10 million last summer in seed funding from the Danish venture capital outfit Northcap. It is going through a new round of funding during which Bausch hopes to raise about €20 million. But the firm’s current strategy is to expand its presence in the U.S. through its Boston office.
“The major challenge we face is the fact that we are in the wrong country. Seed funding in Europe is too fragmented, and if you really want to grow, you should in the U.S. There you have one large and very sophisticated home market, there is more competition but also a way to grow fast,” explains Bausch.
If VeliQ can continue its international expansion, the company could have access to over 197,000 medium-sized U.S. firms, which account for one third of the private sector GDP.