Servicing customer service needs

Helpshift, which provides an in-app customer service platform to companies, is trying to dominate the segment

Wherever there are apps, one finds at least a few confused users. And, wherever there are confused users without ready help, there are customer exits and 'abandoned carts', or unfinished transactions that prove detrimental to mobile service providers.

To address this and provide companies an in-app customer service platform, Abinash Tripathy and Baishampayan Ghose founded Helpshift. Through this platform, companies can communicate with customers while they use the apps, instead of users having to go online to chat or search for a number to call.

In June, the two-year-old start-up, headquartered in California's Silicon Valley, raised $10 million in series-A funding. So far, it has raised a total of $13.2 million from four investors.

The start-up's presence is the strongest in the mobile gaming sector. Tripathy, also Helpshift's chief executive, says currently, this segment accounts for about four-fifths of the $28-billion app economy. Helpshift's clients include gaming giants such as Supercell, Glu and Rovio and the company claims it is ahead of more established customer relationship management, or CRM, companies in this vertical. "When we launched, only traditional CRM products such as Salesforce, Oracle and Zendesk were sold to these companies. A year after our launch, we've pretty much managed to displace all these large incumbents from gaming companies," he says.

For Helpshift, another focus area is the global mobile commerce market, expected to hit $1 trillion in four-five years.

The company's operations are split between Silicon Valley and Pune. In the US, there are about 15 workers who manage sales and distribution, while Pune hosts a 40-strong technology development team, led by Ghose, the company's chief technology officer.

About 60 per cent of Helpshift's clients are in the US. India is a small, albeit rapidly growing market. Helpshift says virtually all the major companies that offer apps, such as Flipkart and The Times of India Group, are clients. "We don't even have a sales team in India. So, it's happening organically," Tripathy says, adding the Indian market is still a year away from maturing.

Helpshift charges its customers according to the number of monthly active users for a particular app. For companies like Supercell, makers of games such as Clash of Clans and Hay Day, this number could be as high as 100 million. Tripathy estimates his company serves about two and a half billion sessions every month for a big gaming firm such as Supercell.

The start-up is in the "early million-dollar range" of annual recurring revenue, according to Tripathy. He says the company isn't focused on becoming profitable right away, pointing to Salesforce not yet recording a profit despite growing to a $5-billion company in the past decade and a half. "I'm not saying this in a negative way; the reason is basically, they reinvested every dollar they earned to build this massive monopoly. That's how Valley companies operate - they just dominate the entire market so there's no room for a No. 2. That's pretty much our model," the Helpshift founder says.

In 2010, Tripathy and Ghose set up a lab company in Pune to build a core tech team. The former had exited his previous start-up, Zimbra, which was acquired by Yahoo for $350 million, and capitalised the new venture for two years. In 2012, the company raised $3.2 million in seed funding from Silicon Valley. "We love Helpshift not only because of its strong founding team, but also because…we see a green field opportunity in native mobile app customer support," wrote Phil Black, a founder of initial investor, True Ventures, in 2012.

Experts caution focusing solely on mobile users has risks. "You might be coming from mobile; you might be calling; you might be going to my website or Facebook or Twitter. An organisation needs to have that contact across different touch points," says Praveen Sengar, principal research analyst for CRM at research firm Gartner.

EXPERT TAKE: Esteban Kolsky

The CRM market is moving from a deep focus on customer service, marketing and sales as separate transactions to bringing these together as integrated transactions.

The second part of the transformation is the type of applications emerging with the cloud. One of the biggest changes the cloud brings is you can have single-function services that provide valuable functionality but are not part of a larger solution or application. Helpshift is an example; it has a single functionality for customer service that isn’t part of a larger suite, but delivers great value to customers.

It has a significant number of customers, good revenue. And, it has secured good funding. It bridges the gap between the mobile world and the traditional CRM function of customer service.

When you look at the technology behind it, it’s far ahead of other MDM (mobile device management) developers. When it started, there was no one else doing it.

For any small vendor, the primary challenge is a large vendor could decide what they’re doing is easy to replicate and compete with them directly. But Helpshift has some features that aren’t easy to replicate without the underlying technology.
The main opportunity is to stick to the explosive growth of mobile devices and support these. That’s a humongous market to be addressed.

Esteban Kolsky is an independent CRM analyst based in the San Francisco Bay Area and an advisor to Helpshift

Kate Leggett, vice-president and principal analyst for CRM at Forrester Research, adds: "There is the challenge of offering a complete solution. Customer service solutions are packed with features and functions which start-ups will take time to match. Third, there is a need to support cross-device and cross-channel conversations while passing context, which is not trivial to solve."

Both analysts note most CRM vendors have mobile offerings.

Tripathy sees his company's main challenges as two-fold - to defend against established companies such as Salesforce and Zendesk, both of which have tried to acquire it, as well as nimble start-ups such as itself.

"I'm not worried about these big web companies because they're so stuck in the web era. What I worry about is the little start-up which can outrun us," says Tripathy.
FACT BOX
Helpshift: Started in 2012
Business: In-app mobile customer support platform
Founders: Abinash Tripathy (CEO); Baishampayan Ghose (CTO)
Offices : San Francisco, Pune
Breakeven : Rs 10 crore per annum
Funding : $3.2 million seed funding in 2012; $10 million Series A funding in 2014
Investors: True Ventures, Nexus Venture Partners, Intel Capital, Visionnaire Ventures