Zendesk

Last updated
Zendesk, Inc.
Type Private
NYSE: ZEN
Industry Software as a service
Founded2007;16 years ago (2007) in Copenhagen, Denmark
Founders
Headquarters San Francisco, California, U.S.
Number of locations
19 (2022)
Key people
  • Tom Eggemeier (CEO)
RevenueIncrease2.svg US$1.34 billion (2021)
Decrease2.svgUS$−166.68 million (2021)
Decrease2.svgUS$−223.64 million (2021)
Total assets Increase2.svgUS$2.45 billion (2021)
Total equity Increase2.svgUS$489.22 million (2021)
Owner
Number of employees
5,860 (December 31, 2021)
Website zendesk.com
Footnotes /references
[1]

Zendesk, Inc. is a Danish-American company headquartered in San Francisco, California. It provides software-as-a-service products related to customer support, sales, and other customer communications. The company was founded in Copenhagen, Denmark, in 2007. Zendesk raised about $86 million in venture capital investments before going public in 2014. [2]

Contents

On November 22, 2022, Zendesk announced that it had been acquired by a group of investors led by Hellman & Friedman and Permira for approximately $10.2 billion. [3]

History

Origins and funding

Zendesk was founded in Copenhagen, Denmark in 2007 by three friends: Morten Primdahl, Alexander Aghassipour, and Mikkel Svane. [4] [5] The founders started developing the Zendesk software in Svane's loft. [6] Initially, Zendesk was funded by the cofounders themselves, each doing consulting jobs to support their families. [6] [7] Within a few months of the Zendesk software-as-a-service product being released in the fall of 2007, it had about 1,000 trial customers. [6] Initially, interest in the software spread slowly through word-of-mouth [6] predominantly among other startups. [8] Adoption accelerated in 2008, due to an increased interest in responding to customer complaints on social media and after Twitter started using Zendesk. [6]

Venture capital investors were willing to invest in Zendesk only if the company moved to the United States, [4] where most of their customers were. [6] In 2009 Zendesk moved to Boston, Massachusetts. About six months later, they made a second move, this time to San Francisco, California. [4] [9] The company raised $500,000 in seed funding, which was followed by a series A funding round for an undisclosed amount [10] and a series B round for $6 million. [6] Zendesk raised $19 million in a series C funding round in December 2010, [4] followed by $60 million in a series D funding round in 2012. [11] This brought total venture capital funding to about $86 million. [4]

2010–2016

In 2010, many customers threatened to leave Zendesk in response to a substantial price increase after new features were introduced. [12] Zendesk apologized, abandoned the pricing, and promised never to change pricing on pre-existing customers for features they already have. [9] That same year, Zendesk created its first sales team. [6] Zendesk moved to larger offices in the Tenderloin neighborhood of San Francisco in 2011. [7] The city and county of San Francisco provided Zendesk with a six-year payroll tax incentive to move to the area in exchange for doing community service. [4] [7]

Zendesk grew internationally, and offices were established in Ireland, Denmark, and Australia. [4] [13] In 2017, Zendesk opened an office in Singapore. [14] As of  2011 half of Zendesk's customers were outside the United States. [4] Although the company was not yet profitable, Zendesk's revenues grew five-fold from 2010 to 2012. [4] Revenues grew from $38 million in 2012 to $72 million in 2013. [5] Zendesk introduced its first app marketplace for third-party Zendesk software in 2012. [6] By 2013, the company had 450 employees. [6]

In 2014, Zendesk filed an initial public offering [15] and was valued at $1.7 billion. [5] The IPO raised $100 million. [16] That same year, Zendesk announced its first acquisition. [17] It bought a live-chat company called Zopim for $29.8 million. [17] It acquired a French analytics company called BIME for $45 million. [18] It also acquired Outbound.io, which developed software to manage direct communications with customers on social media sites. [19] Additionally, Zendesk acquired Base, who developed sales automation software that competed with Salesforce.com, for $50 million. [20]

In 2015, Zendesk filed oppositions at the United States Patent and Trademark Office to 49 trademarks including the word "zen". The Electronic Frontier Foundation characterized their approach of filing multiple trademark infringement lawsuits covering a wide range of businesses as trademark trolling, and EFF condemned the practice. [21] [22] [23]

Initially, Zendesk's software was focused on assisting small businesses, but it transitioned to aid larger companies over time. [24] [25] Zendesk also transitioned from a focus on inbound customer inquiries into communicating with customers proactively based on comments they made online. [19] In 2016, Zendesk changed its logo and rebranded to emphasize contacting customers proactively. [26] It added features that turn online reviews and comments into a customer help ticket in September 2016 and acquired Outbound.io, which helps businesses respond to online complaints in 2017. [19] [27] Zendesk introduced new analytics and automation products in 2012 [28] and 2016. [26] In 2016, it added features that tell customer service agents which portions of the website a customer visited before contacting customer support. [29] That same year, Zendesk added features that attempt to predict which customers are most likely to cancel their subscription service. [30]

Recent history

In 2017, Zendesk added an AI bot that has conversations with customers and attempts to direct the customer to the answer they're looking for. [31] The bot initially had limited functionality, but was expanded in 2019. [31] In 2018, the company introduced Zendesk Suite, which combines social media, live-chat, email, and other communications into a single ticket system. [32] An enterprise version of the software-as-a-service product was released in 2018. [24] By that time, 40 percent of Zendesk's revenue was coming from larger companies. [24] In 2019, Zendesk first released its "Sunshine" tool, which is focused on direct-messaging customers on social media sites. [33]

Zendesk eventually expanded from just customer service to also managing other customer interactions, such as sales. [34] The company first moved into sales software with its September 2018 acquisition of competitor Base. [35] [34] Base was later renamed Sell and a Sell Marketplace was created for corresponding third-party apps. [35] Part of the social media software acquired from Smooch was rebranded as Sunshine Conversations, a tool that competes with Salesforce.com. [36] [37] Zendesk's sales automation software was later revamped with Zendesk Sell in 2020, which improved integration with Zendesk's customer support software. [37] Since then, Zendesk marketplace has integrated several third parties technologies to provide more services to the end customers. In 2021 for example, several companies joined Zendesk marketplace, such as Crowlingo for multilingual data collection, Verse for lead conversion and ViiBE for remote visual support. [38]

By 2018, Zendesk had annual revenues of $500 million. [39] [31]

In October 2019, Zendesk disclosed that it was hacked in 2016, resulting in a potential leak of information about customer service agents using Zendesk. [40]

In May 2019, Zendesk acquired Montreal-based Smooch, for an undisclosed amount. Smooch provided messaging services on websites for live-chat customer support. [31] In 2020, Zendesk announced more tools for messaging customers on social media and enhancements to its customer relationship management features. [36] [41]

In October 2021, Zendesk announced that it was acquiring Momentive Global Inc., formerly SurveyMonkey, for $4.13 billion. [42] Zendesk's investors rejected the deal on February 25, 2022 and terminated the agreement due to risk. [43]

In June 2022, it was announced that Zendesk would be acquired by a consortium of private-equity firms led by Permira and Hellman & Friedman in an all-cash deal worth $10.2 billion. [44] Thereafter due to the pending acquisition by these firms Zendesk neither provided shareholder's letter nor held a conference call or webcast to disclose the financial results for the third quarter ending September 30, 2022. [45]

In September 2022, with the closure of 3rd quarter the financial results were out with a substantial increase in revenue by 20% over the year to $416.9 million and GAAP operating loss of $55.4 million with non-GAAP operating income of $48.9 million. In addition to this due to the impending transaction, Zendesk suspended it's financial guidance for the fiscal year ending December 30, 2022. [45]

In November 2022, it was announced that the investor group had completed the acquisition of Zendesk for approximately $10.2 billion. [46]

In June 2023, Zendesk announced it had acquired Tymeshift for an undisclosed price. [47]

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References

  1. ↑ Zendesk 10-K FY 2021 (PDF), 2021-12-31
  2. ↑ Dealroom, .co (11 November 2022). "Zendesk company information, funding and investors". app.dealroom.co. Retrieved 11 November 2022.
  3. ↑ "Consortium led by Hellman & Friedman and Permira completes acquisition of Zendesk". Permira. Retrieved 2022-12-28.
  4. 1 2 3 4 5 6 7 8 9 Shinal, John (July 28, 2011). "Startup Strives to Make Customer Service a More 'Zen' Experience". Entrepreneur. Retrieved October 2, 2020.
  5. 1 2 3 Kim, Eugene (December 16, 2014). "How This CEO Was Able To Take His Company Public When Everybody Else Was Panicking". Business Insider. Retrieved October 2, 2020.
  6. 1 2 3 4 5 6 7 8 9 10 Rao, Leena (November 16, 2013). "From Its Beginnings In A Denmark Loft, Zendesk's Steady Rise To The Top Of The Helpdesk Heap". TechCrunch. Retrieved August 16, 2023.
  7. 1 2 3 Locke, Laura (July 30, 2014). "The tech firm helping a tough area". BBC News. Retrieved October 2, 2020.
  8. ↑ "How Zendesk's Founders Built a $2.1 Billion Business by Ignoring Investors' Advice". Inc.com. January 25, 2017. Retrieved October 12, 2020.
  9. 1 2 Roush, Wade (August 4, 2010). "Xconomy: Making Customer Support Sexy: Zendesk's Help Desk Lovefest". Xconomy. Retrieved October 2, 2020.
  10. ↑ Wauters, Robin (May 7, 2009). "Zendesk Secures Funding For SaaS Help Desk System, Heads To The U.S." TechCrunch. Retrieved October 4, 2020.
  11. ↑ Gannes, Liz (September 12, 2012). "Enterprise Is So Hot Right Now: Zendesk Raises $60M for Customer Service (Video)". AllThingsD. Retrieved October 2, 2020.
  12. ↑ Wauters, Robin (May 18, 2010). "Zendesk Raises Prices, Pisses Off Customers". TechCrunch. Retrieved October 4, 2020.
  13. ↑ Dishman, Lydia (October 14, 2011). "Zendesk CEO Mikkel Svane: Complaints Are Good for Business". Fast Company. Retrieved October 2, 2020.
  14. ↑ "Zendesk to expand S'pore office, hire staff". The Straits Times. February 23, 2017. Retrieved October 12, 2020.
  15. ↑ Wiggers, Kyle (May 22, 2019). "Zendesk acquires conversational platform Smooch, launches new WhatsApp and Slack integrations". VentureBeat. Retrieved October 12, 2020.
  16. ↑ "Zendesk raises $100M in IPO -- and traders love it (updated)". VentureBeat. May 15, 2014. Retrieved October 13, 2020.
  17. 1 2 Lunden, Ingrid (April 10, 2014). "Zendesk Buys Live Chat Provider Zopim For Up To $29.8M As It Files For $150M IPO – TechCrunch". TechCrunch. Retrieved October 13, 2020.
  18. ↑ Kepes, Ben (October 15, 2015). "Zendesk acquires BIME Analytics -- but what of the GoodData bromance?". Computerworld. Retrieved October 12, 2020.
  19. 1 2 3 Yeung, Ken (May 4, 2017). "Zendesk acquires Outbound.io to help companies proactively approach customers". VentureBeat. Retrieved October 12, 2020.
  20. ↑ Miller, Ron (September 10, 2018). "Zendesk expands into CRM with Base acquisition". TechCrunch. Retrieved October 12, 2020.
  21. ↑ "Startups fighting over the word 'zen'". Sfgate.com . December 19, 2014. Retrieved August 8, 2018.
  22. ↑ "Zendesk And The Art Of Trademark Maintenance". Forbes . December 20, 2014. Retrieved August 8, 2018.
  23. ↑ "Zendesk and the Art of Trademark Trolling". Electronic Frontier Foundation . May 20, 2016. Retrieved August 8, 2018.
  24. 1 2 3 Miller, Ron (April 3, 2018). "Zendesk hits $500M run rate, launches enterprise content management platform". TechCrunch. Retrieved October 12, 2020.
  25. ↑ Miller, Ron (September 17, 2014). "Zendesk Gets Serious About The Enterprise". TechCrunch. Retrieved October 13, 2020.
  26. 1 2 Yeung, Ken (October 26, 2016). "Zendesk launches new tools to help brands get ahead on customer service". VentureBeat. Retrieved October 12, 2020.
  27. ↑ Johnson, Khari (September 15, 2016). "How Zendesk plans to turn online customer reviews into conversations". VentureBeat. Retrieved October 12, 2020.
  28. ↑ King, Rachel (March 15, 2012). "Zendesk using analytics to understand 'silent' customers". ZDNet. Retrieved October 13, 2020.
  29. ↑ "Zendesk's Pathfinder helps customer service reps see what you're searching for". VentureBeat. March 17, 2016. Retrieved October 12, 2020.
  30. ↑ Kim, Eugene (March 15, 2016). "Zendesk can now predict who's likely to stop using your service before you do". Business Insider. Retrieved October 12, 2020.
  31. 1 2 3 4 Wiggers, Kyle (June 12, 2019). "Zendesk launches Answer Bot API and mobile SDKs, rolls out Guide Enterprise improvements". VentureBeat. Retrieved October 12, 2020.
  32. ↑ Watts, Rob (May 17, 2018). "Zendesk Launches Zendesk Suite and Zendesk Connect". PCMAG. Retrieved October 12, 2020.
  33. ↑ Condon, Stephanie (October 3, 2019). "Zendesk introduces Sunshine Conversations for customer messaging". ZDNet.
  34. 1 2 Miller, Ron (November 13, 2018). "Zendesk shifts to platform play with Zendesk Sunshine launch – TechCrunch". TechCrunch. Retrieved October 12, 2020.
  35. 1 2 Miller, Ron (March 4, 2020). "Zendesk's latest tools designed to give fuller view of the customer". TechCrunch. Retrieved October 11, 2020.
  36. 1 2 Sevilla, Gadjo (March 31, 2020). "Zendesk's Adds Conversations to New Sales and Service Suites". PCMAG. Retrieved October 11, 2020.
  37. 1 2 "Zendesk Aims for Greater Piece of CRM Pie With Sunshine". eWEEK. October 11, 2020. Retrieved October 12, 2020.
  38. ↑ "Integrations to keep your summer going". 30 July 2021.
  39. ↑ Condon, Stephanie (May 17, 2018). "Zendesk rolls out new products for more integrated customer service". ZDNet. Retrieved October 12, 2020.
  40. ↑ Cimpanu, Catalin (October 2, 2019). "Zendesk discloses 2016 data breach". ZDNet. Retrieved October 11, 2020.
  41. ↑ Condon, Stephanie (March 4, 2020). "Zendesk launches Sales Suite, bundling Zendesk Sell, Chat and other tools". ZDNet. Retrieved October 11, 2020.
  42. ↑ Ron Miller (November 1, 2021). "Zendesk moves into customer experience data with $4.13B SurveyMonkey deal". TechCrunch. Retrieved November 12, 2021.
  43. ↑ Herbst-Bayliss, Svea (2022-02-25). "Zendesk investors reject deal to buy SurveyMonkey parent". Reuters . Retrieved 2022-02-27.
  44. ↑ Ron Miller (June 24, 2022). "Zendesk drama concludes with $10.2 billion private equity acquisition". TechCrunch .
  45. 1 2 Business, wire (27 October 2022). "Zendesk Announces Third Quarter 2022 Results". Businesswire. Retrieved 11 November 2022.{{cite web}}: |last= has generic name (help)
  46. ↑ Miller, Ron (2022-06-24). "Zendesk drama concludes with $10.2 billion private equity acquisition". TechCrunch. Retrieved 2023-05-25.
  47. ↑ "Zendesk acquires Tymeshift for optimized customer service". SiliconANGLE. 2023-06-22. Retrieved 2023-08-10.
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