Enterprise file-sharing platform provider Egnyte has today announced significant expansion in Europe, hiring a general manager and opening up a London branch.
The company has moved Mark Rattley to the top EMEA job, with the former EMC vice president of sales coming on board as vice president and general manager for the new Egnyte Europe.
Egynte isn’t just looking to London for expansion however, with a data centre previously opened in the Netherlands, as well as a 25-strong design and engineering team based in Poland.
Vineet Jain is the CEO and co-founder of Egnyte. Having worked in the States for over 20 years, a style that he describes as a “little slow and deliberate” means that it’s taken this long for his company to expand outside of the US.
Yet the Egnyte CEO has legitimate reasons for this reticence, telling CloudTech that he had stedfastly refused the board’s request to open up a European branch last year.
“You need to strengthen into a specific territory before you go and fight another war,” he says. “I said [to the board] ‘guys, I need to make sure that the home ground is covered before I go into the UK, or Europe.’
“It’s very ego-pleasing to tell people ‘yeah, we have an office in London, one in Madrid, one in France, whatever it might be,’” he adds. “[But] I have only – and I put that in double quotes – raised $62.5m. This is the least amount of capital anyone has raised in our space.”
Backed by seven investors, including Google Ventures, CenturyLink and Seagate, it pales when compared to Dropbox’s $607m total and Box’s $414m. Plenty of speculation can be levelled at this – is the more consumer-oriented focus of Egynte’s rivals a more attractive proposition? – yet Jain’s targets for the company are clearly set out, with a little wiggle room.
“My target here, as long as we can execute, should be cashflow break even by Q4 of this year,” he explains. “The company should be able to crack into triple digit revenue beyond the point of profitability in 2015.”
Thoughts naturally turn to Box and its S-1, filed last month. Jain admits the losses on the form were “scary”, but for the sake of the space, and his company, he wants Box to have a good IPO.
“I’d rather see exuberance and excitement in this space with this impending IPO,” he says. “Right now a lot of sins are being forgotten in the Valley because of crazy valuations, and there’s the belief that ‘let the top line grow eventually, we’ll figure it out.’
“I’m hoping they can ride that out, because it will help us,” he adds. With the strategy set out, Jain told CloudTech that Egnyte might ‘have a shot’ at S-1 filing by late 2015 if it can execute.
Expansion in Europe, therefore, is key. Jain hopes to hire ‘at least 25, maximum 40’ new employees in this zone, and has the loose aim to have one fifth of new revenue generated to be from outside North America.
“The big goal here, for the next 18 months, is sales and marketing expansion,” he explains.
All in all, it’s a pragmatic approach from Jain – one that’s built on a sense of being at the right place at the right time, as well as taking current tech market valuations with a pinch of salt.
“When I started this, I had no idea that I’d be in such a hot space,” Jain adds. “There’s a lot of serendipity in where we are, and honestly I would like to acknowledge that.
“I think we are beyond the bubble territory, where the valuations are completely out of whack. Of the IPOs that have happened in the last nine months, 70% of the companies are not profitable.
“That’s a sign of the times, but I really worry that it cannot continue. Some basic financial sense has to creep back in!”
It’s hard to disagree – which solidifies the claim that this is the right time for Egnyte to move to Europe.