Jonathan Anguelov on Aircall’s $65 million Series C success

Aircall, “the phone system for modern business,” goes far beyond the call centers of old by playing well with third-party integrations that allow companies to do everything from viewing customers’ history and call transcripts in their CRM to making or receiving calls directly within Intercom Messenger.

These next-gen capabilities make it an extremely valuable company for the future of work, and investors agree: yesterday, Aircall announced a successful $65 million Series C round, bringing their total investment to $106 million.

The message is clear: While our confinement at home may be temporary, the current health crisis has acted as a time machine that has forced companies to complete their transition into organizations that can do business anywhere and any time.

We sat down with Jonathan Anguelov, COO of Aircall, to hear about this huge new development and the company’s ambitious plans for the future, which include even more integrations, expanding its sales force and making inroads in Australia and APAC at large.

In this episode, we delve into everything from how to raise capital during a pandemic to why Aircall decided to make the leap to becoming a platform.

Short on time? Here are five quick takeaways:

1. One of Aircall’s superpowers is that it built an App Marketplace – and then opened it up for partners to build their own integrations. Today, more than 60% of the tools on the marketplace have been built by third parties. That’s the power of becoming a platform.
2. Resilient companies are built in the cloud. While older legacy companies have struggled to adapt to working at home, agile modernists like Aircall have taken advantage of total integration with the cloud to seamlessly make the switch.
3. In the absence of a brick-and-mortar storefront in the SaaS age, your only shop is now the support department. Customer experience is more important than ever, which is why Aircall relies on a single record system that allows associates to refer back to earlier conversations for context.
4. Retention is the new conversion. New sales are important and necessary, but without the happiness and loyalty of your customers, it is impossible to build a billion-dollar company.
5. While Aircall is moving forward with AI features, Jonathan stresses that bots will never fully replace human interaction. Rather, the two will work hand-in-hand to serve customer needs in the most efficient way possible.

If you enjoy the conversation, check out more episodes of our podcast. You can subscribe on iTunes, stream on Spotify or grab the RSS feed in your player of choice. What follows is a lightly edited transcript of the episode.

Catherine: Jonathan, we’re absolutely delighted to have you as a guest on Inside Intercom today. Before we kick off, though, we just wanted to say a huge congratulations on a very exciting announcement for Aircall. Do you want to share some details of what that was with our audience?

Jonathan: Yeah, we are very excited, after almost six years now of Aircall being live, to announce that we just raised our Series C round for $65 million. That really is a big step for us, because it shows the trust of our investors and the market in general towards the fact that Aircall is revolutionizing the phone system industry and changing the way phone systems are being used all over the world. It’s a big, big step for Aircall, and I’m extremely proud of the team that helped us go towards that and finally achieve that Series C round during the horrible period that COVID was.

Raising investments during a pandemic

Catherine: It really is an impressive raise, and congrats to everybody involved, especially coming at a time of significant challenge across the business world. Can you walk through the process of what fundraising was like during COVID-19, especially compared to previous experiences for you?

Jonathan: Of course. Usually it’s very straightforward. We meet with different investors all of the time. We meet them every quarter or every month and give them specific updates about where Aircall is. We started like that, and things went very well until we got our first few term sheets. A term sheet is when an investor is interested in the investment and gives a specific letter saying, “Here is how much I want to offer and on which valuation.” So we got our first few, and then the worst period of COVID started just after the first term sheet, and there was a lot of panicking on the market. A lot of companies started to lay off people.

A lot of investors started to panic: Are we still able to invest? What’s going on? And in the middle of this storm, somehow we reassured our investors, explaining to them that actually Aircall is very resilient during this period, because Aircall is a phone system that is 100% cloud-based, and it’s exactly the tool companies will be needing during this. And actually, we will get better results during these periods than we could have. Things went well, and we were able to close a few weeks after the confinement started all over the world and especially in Paris and New York where we have two offices.

“The more value we could bring, the more interesting and sticky our business model could become”

Catherine: That’s really amazing. It sounds like it was just an incredible effort on the part of the whole Aircall team. Jonathan, you mentioned Aircall’s original vision and mission back in 2014 when you got started was to reinvent the business phone. How has that changed for you in the intervening six years – and especially in the last couple of months as more and more traditional businesses are meeting online?

Jonathan: Back in 2014, we thought, “Okay, we need to be able to build a phone system that any entrepreneur can use anywhere in the world.” That was the basis of our idea. Then with time, we realized that the entrepreneur is one person or two people; it’s a small bracket inside the market. So in 2015, we started targeting bigger companies in general, not just the entrepreneur who needs a phone line for his business. We evolved towards the fact that actually it’s good to give a cloud-based phone system to companies, but we realized that now we need to bring more value. The more value we could bring, the more interesting and sticky our business model could become.

That’s where we started with the idea of making integrations to integrate Aircall into the business tools that companies are already using. So it could be their CRM if it’s for a sales team. It could be a help desk if it’s for a customer support department. It can be an Applicant Tracking System for HR teams, et cetera. By bringing in the voice and putting each conversation you have into your system of record, then you bring a lot of value because you have recordings of the conversations, but you also have the transcripts of those conversations, and you can also analyze them, analyze the voice, analyze the intonation.

Is the guy confident about what he is saying? Is Sales saying the right thing? Is the customer happy? You can make tons of analyses once you have the voice. This is what we are going towards in 2020 and 2021: bringing even more value, which means bringing AI into conversations.

The power is in the partnership

Catherine: That’s fantastic, and it sounds like having a really robust ecosystem from early days has been core to your success at Aircall. And indeed you do have an integration with Intercom so that we can marry up live chat and phone service to deliver a really great end-to-end customer experience. I know you launched your app marketplace at the end of last year and have seen a lot of growth in the number of integration partners you have built out since. What do you think are the biggest opportunities ahead in terms of innovation and types of partnerships that Aircall can build with other partners to, as you’ve mentioned, amplify the power of voice?

Jonathan: That’s an extremely good question, Catherine. It’s very interesting what happened, because when we started back in the day to integrate the phone system into the system of records, people were like: “Okay, where are those guys going? They will need to build tons of integrations. They will need to maintain those integrations.” It was very hard. The person who told me, “You will have a hard time,” was right. We had a hard time, but the good news is that we really created a segment in our market: the segment of the phone system integrated into the business tools. What happened – and it happened with Intercom, but it happened also with others – is that some software vendors came to us and said, “Hey, we want to build the integration with Aircall, because our customers are requesting a phone conversation.”

“Our team designed our API and all our software towards the fact that other vendors can create their integrations with Aircall”

They’re asking us, “Can we bring voice into our tools?'” And our power is that we created that marketplace, and we are not the only one that built on it. More than 60% of the tools on our marketplace are actually built by our integration partners. Intercom is an example of that. You can build Intercom now with Aircall so that you’re able to launch a code directly from the chatbot of Intercom. That was built by Intercom directly. Other software vendors come to us as well, because we are becoming the one phone system that you want to integrate with your business tools that you’re sending.

Our team designed our API and all our software towards the fact that other vendors can create their integrations with Aircall. So that gives us a real business opportunity to have hundreds of integrations building on top of Aircall, and that’s actually why investors invest in us. It’s not just because we’re a standalone product. No, we are the phone system that any company – any software – will want to integrate into their business to help their customers be better over the phone.

Catherine: So the power really is in the partnerships. For companies that are starting to build a tech stack now – particularly those more traditional businesses that are starting to need to move to the cloud over the last couple of months – what should their ideal stack look like?

“When we look at the crisis, the resilient businesses are the ones that can work at the office as well as at home”

Jonathan: As much as possible, you need to be in the cloud. When we look at the crisis, the resilient businesses are the ones that can work at the office as well as at home. I don’t want to throw flowers on ourselves, but for Aircall it’s been three months almost we are confined, and I don’t see any difficulties, really. Teams are organized. People do their meetings. People are working even harder, I would say, because you’re home, and let’s say you have nothing better to do. The management style is very lean, so we are able to give a lot of capabilities to our teammates so that they work on their own. My advice is to be in the cloud as much as possible with the tools you use, with your abilities to do meetings overseas, to talk with your customers. Don’t over-invest too much in hardware, because we don’t know what the future will look like, but for sure the future is going toward cloud capabilities in general.

So that’s cloud CRM, cloud help desk, cloud phone system, cloud video conferencing, cloud chat – everything cloud! I would say IT managers really need to go towards that. Funny, I have a friend of mine that works in a big Fortune 500 company I won’t mention, and they were in so much in trouble during the period because they were like: “Okay, we used to chat internally, but that internal chat only works on my computer at the office. With my computer at home, it doesn’t work. I don’t have the hardware, so we cannot do it.” They had to switch over everything and started almost from zero to be able to work confined. It just shows that having tools that are purely cloud, that do not need too much maintenance is the right way to do it.

The COVID time machine

Catherine: It’s interesting that you mentioned that massive shift in a short space of time. We actually had Loren Padleford from Shopify on the podcast recently, and he made the point that COVID-19 has given many businesses a time machine. It’s really been an accelerant for a shift online that would have taken maybe decades to occur in normal circumstances. What’s your take on that? Do you think that this is a permanent shift, or is there any going back at this point?

Jonathan: I think it’s a permanent shift. Loren is totally right. I think digitalization is currently being pushed harder by this crisis than we would have ever been able to push, because it makes people realize. We’ve seen that at Aircall, and I’m sure you’ve seen that at Intercom, as well. People from one day to the next were cold emailing, cold calling, saying: ”Hey, we need to do a phone system, purely cloud. We need to connect it to our CRM so we can track what our customer service department is doing to make sure that we have a good quality of service. We need to be able to also look at our sales, et cetera.”

They’re coming faster than ever. I have some funny examples, some companies that came to us that we had been hunting for five years, back in the days when we started Aircall. They were always like: “Yeah, we are not ready yet. It’s not the right time.” They always had a good excuse, let’s say. And now they are like: “Okay, we need something right now. I mean today, in the next hour.” That was funny, and it made me realize the power of these new tools that we’re all building here. The SaaS model is that, once the decision is taken, you’re able to implement the tool anywhere in the world with any type of company. We are definitely seeing very interesting things during that period. It’s horrible for most companies, but somehow we are a little saved by our business model there.

“The thing I’m the most proud of is how I saw my team working and really helping each company like it was their own”

Catherine: Absolutely. Saved by the business model is an interesting way of looking at it. It sounds like you guys have had an exceptionally busy couple of months as more and more businesses move towards this new way of working. Can you maybe talk a little bit about the impacts that has had on Aircall and the business specifically since March?

Jonathan: In the beginning we thought, “Okay, what kind of company are we?” I built Aircall with the idea of helping companies be better. Very easily, we could have thought, “Okay, let’s profit from the crisis to make tons of money,” but we didn’t want to do that. What we wanted is actually to keep our first mission, which is to help companies. So during this period, the first thing we did was offer Aircall for free to every new company that needs to digitize during the COVID period. We wanted to give them a hand, because it’s a hard period for everyone. We’ve been more busy than ever during March and April, because we had tons of requests and people panicking, people not being cloud-ready at all or organized.

So we gave a lot of help. The thing I’m the most proud of is how I saw my team working and really helping each company like it was their own. So it was very, very impressive. What has changed inside Aircall is our ability to work remotely, to do syncs very regularly and make sure that each company that started with Aircall is not just a potential new customer, but thinking: “How can we really help these companies? How can we provide the best service at every single interaction?” Because very easily, you can lose yourself. When you get tons of leads, you can say, “Okay, let’s do it quick and dirty and we’ll see later.” But what we keep at Aircall is our customer experience and our customer satisfaction, which are the most important aspects in any business.

Support is now your shop window

Catherine: I know you’re currently in the process of shifting your support operation over to actually use Intercom for live tasks as part of this journey. Could you talk about how customer experience has helped you to differentiate and how you want to continue along that path?

Jonathan: Definitely. I don’t want to do any advertising for you, but when we started, Intercom was the first tool we implemented at Aircall, to be honest. We had another help desk, and I realized that we had a problem of record, because we had a help desk for the support department. We had a chat for the Sales department. We had a chat for the Support department and several systems of record. We had a different CRM for the sales, et cetera. I realized I wanted one tool that was able to communicate the same way to our customers. So if I decide I want to communicate one thing to one group of customers or to send a particular message when the customer is doing a specific action, the only way is to have a system of record that is consolidated as much as possible.

“In a SaaS world where you don’t have shops anymore, your only shop is actually your customer support department”

That’s why actually we choose to move the customer support department to Intercom recently as well, because we want to have one system of record where we communicate with our customers, and it can also be the one we communicate with our prospects. The chat on our website remains Intercom because the first talk you have with your customer is probably the most important. Your customer support chat is then the second most important, because in a SaaS world where you don’t have shops anymore, your only shop is actually your customer support department.

If your customer support department is not good, and the interaction your customer has with them is not at a good level, that’s what they will remember. For us, it was extremely important to have a consistent way of speaking with our customer from the moment Sales starts to talk to them. We show them that we know them. We have a history of talk with them. We have all the last calls and the last webinars we had with them, so we know the customer up to the moment a customer comes to us because he has a problem, because yeah, it happens. If he has a question, it’s good that he has this feeling that we know him and his history.

“What will make the billion-dollar company is actually the net retention: Are you able to keep your customers happy?”

That’s actually in the DNA of Aircall: to push each interaction you have with your customer into the system of record. So it was funny for us, not having built our own stack that way, that Intercom actually goes towards that and will help us achieve that excellence. We were targeting for that.

Catherine: That’s fantastic. To paraphrase one of our founders, Des Traynor, retention is the new conversion. It certainly sounds like you’ve thought a lot about the importance of delivering a great customer experience as part of that.

Jonathan: Retention is something extremely important, especially as you grow. It’s always important, of course, but what will make a company a billion-dollar company is not necessarily the sales. It’s the wrong way to look at it. What will make the billion-dollar company is actually the net retention: Are you able to keep your customers happy? Because a good company will have 130% net retention. So you start the year with your current database. At the end of the year, you already grew 30%. So the rest is new sales. Bring on your 70% of new sales – and that’s good and you just doubled – but without the net retention and the happiness of your customers, it is impossible to build a billion-dollar company.

Catherine: I know there are lots of narratives about US companies coming to Europe and driving expansion here, but you guys have done exactly the opposite by opening up your first office in the US. How are you thinking about expansion in the US and indeed in other markets, particularly now with a Series C raised and a solid runway for the future?

“As an entrepreneur, there is nothing better than to feel what you are doing helps others go through difficult times”

Jonathan: When we started Aircall, the first thing my cofounder Olivier told me was: “Hey, Jon, we need to be an American company. If you want to succeed in that business, we need to have an American DNA. We need to have our first and biggest market needs in the US.” When we finally started Aircall, our first customer that subscribed actually was an American customer. We thought, “If we succeed in the US, we will be succeeding elsewhere.” We are four French co-founders, but we thought, “Okay, how can we very early go into the US and have this English-American DNA?”

Everything was in English: the website, the app, the dashboard, everything. And very early, we saw attraction in the US. We were also growing quite fast in Europe, but we said, “Okay, let’s start an office in the US.” And actually, no one really knows it, but we started in San Francisco. We did an accelerator there called 500 Startups, where we actually built the US office in San Francisco. That was back in 2015 where the four co-founders were there during three months building the basics of Aircall. Then we went back to Paris, and we had this full-time employee in San Francisco on his own with an intern. So it was really the early days.

But we realized that it’s great to be in the US. We had great traction, and things went well, but San Francisco is kind of far from Paris, and it was complicated to have constructive discussions and be able to meet regularly. So we decided in 2016 to actually move that office to New York. When you’re small you’re agile. We were 30 or 40 people by that time; it would be harder to do it today, as we are more than 350. And my co-founder Olivier, who is the CEO of the company, actually said, “Okay, I’ll move with my wife and kids, and we will go full blast in the US.” Today, the US is over 35% of our recurring revenue, so it’s our biggest market, way in front of the other markets.

Then we have our European DNA, which of course remains with the UK, France, Germany and Spain being the main countries. We are planning actually to open in Australia and APAC in 2021 to tackle the market there, because we don’t have a huge presence yet, but we see a huge attraction for us.

A partnership with the French government

Catherine: That’s fantastic, although I imagine the shuffle between three time zones will be a whole new experience for you and the Aircall team. To bring things a little bit closer to home, we’d love to hear from you about a really amazing partnership that you built with the French government alongside Salesforce recently. How did this come about and what did it involve?

Jonathan: It’s exactly what I was saying before. We thought, “How can we, as a French company and as French citizens, help our country to go through these difficulties?” I was very worried about our world when we started. I was worried we were going through a cataclysm, but we are not a nonprofit company. We are not feeding people, unfortunately. So we thought, “Okay, how can we help?” And we contacted a few departments inside the government to say: “We want to help citizens that are isolated or senior people who cannot do their grocery themselves or that have specific questions about anything. We want to build a call center for those people to cope.”

“What is sure is that today more than ever, people will need to talk. People need to communicate”

Governments usually work with very old-school call center tools that take months to set up. We were working with a few departments of the government already, but they heard of us through the different marketing we did during that period. And in less than a day, Salesforce and Aircall actually partnered to build a call center of about 150 people that answer day and night to French citizens that have questions. Probably the thing I was the most proud of is the feeling that we are contributing to help. As an entrepreneur, there is nothing better than to feel what you are doing helps others go through difficult times. It also shows the resilience of companies to be able to put aside business and try to see how we can help the others to achieve their goals.

Catherine: Do you feel that there are other opportunities ahead or any future in this new way of connecting civil amenities and citizens in digital engagement?

“More than ever, you want to measure the satisfaction of the people. And I think the best way to do that is through conversations”

Jonathan: What is sure is that today more than ever, people will need to talk. People need to communicate. Over the years, we really thought everything would happen online: You don’t need to talk to a human. Chatbots will revolutionize everything. And it’s true. It helps on one side, but on the other side, more than ever, you want to be able to talk to people. You want to be able to have a system of records with the last interactions you had with the person. More than ever, you want to measure the satisfaction of the people. And I think the best way to do that is through conversations. If we talk about features – it has been on our roadmap for years now – we are moving forward with bringing AI in true voice.

We want to help customer support departments or sales departments train their salespeople to get better, monitor the quality of what they say and become best-in-class in the customer experience, because this is, at the end of the day, what will make a business successful is its ability to satisfy the customer.

Catherine: Those are really inspiring thoughts, Jonathan. Before we let you go today, I would actually love to hear about what or who inspires you at the moment. Is there a business leader that you really aspire to in your work?

Jonathan: Honestly, I’m so focused on Aircall that I don’t have so much time to look at inspiring people. I know there are tons of them, but in the current situation the only thing that inspires me is our team at Aircall, which has been doing tremendously well during that period. What inspires me is their ability to shift from one way to working to another. I really don’t have time to look around, so I think inspiration comes from inside Aircall and from what we are doing, rather from outside for now.

“I love to share my mistakes more than my successes, to be honest, because you go deeper than when you only do things right”

Catherine: Absolutely. It’s been really fantastic to see all of that hard work from the team translation to your latest funding round, so congrats again to everybody involved there. It’s a really great outcome for you. Last but not least, Jonathan, if folks are looking to keep up with your work, where can they catch up with you?

Jonathan: I try to answer email much as possible. On LinkedIn as well, I try to publish things from time to time. I’m trying to do more and more podcasts, because a lot of young entrepreneurs try to get inspiration and avoid making mistakes. I love to share my mistakes more than my successes, to be honest, because you go deeper than when you only do things right.

Catherine: Jonathan Anguelov from Aircall, it has been an absolute pleasure having you on the podcast today. Thank you so much for joining us.

Jonathan: Thanks, Catherine. Thank you very much.