openphone rings up $14 million to put your work phone in an app

The landscape of communication is undergoing rapid transformation. We now utilize a diverse range of social media platforms for personal connections, Slack for workplace conversations, Discord for communities and gaming, and Zoom or FaceTime when direct visual interaction is desired.

However, traditional business phone systems have largely remained unchanged. OpenPhone is aiming to modernize this aspect of professional communication.

The company recently announced the completion of a $14 million Series A funding round, intending to integrate the contemporary communication features we rely on daily into our work phone experiences. This funding round was spearheaded by David Sacks of Craft Ventures, with additional investment from Slow Ventures, Kindred Ventures, Y Combinator, Garage Capital and Chapter One Ventures.

OpenPhone empowers employees to make phone calls, send text messages, and enrich their business contacts with additional information, all within a single application accessible on both their phones and computers. Furthermore, the platform facilitates collaborative work across an organization. For instance, a business or department can operate with a unified shared number alongside individual employee numbers, while also enabling the sharing and synchronization of contact details throughout the company.

In conjunction with the funding announcement, OpenPhone is also launching several new features, including integrations with HubSpot and Zapier. The application is also introducing international calling capabilities, group messaging for team members, a search function, and analytics to track OpenPhone usage.

The company highlights that 77% of consumers prefer to communicate with businesses via text message, and that over 80% of small businesses currently use personal mobile phones for professional communications. Existing solutions, however, often involve complex phone systems lacking robust messaging features.

OpenPhone is not alone in its effort to update the work phone for the modern era. Companies like RingCentral and DialPad are also focused on cloud-based phone systems, having secured $44 million and $220 million in funding, respectively, and attracting significant investment from firms such as Sequoia and a16z.

OpenPhone’s pricing begins at $10 per user per month for the basic plan, with more comprehensive options available for more demanding requirements. The startup welcomes direct sales to individuals within organizations, employing a bottom-up sales strategy.

“A significant hurdle we’ve faced is standing out in a crowded market,” explained co-founder and CEO Mahyar Raissi. “Our approach is to focus on building OpenPhone for startups, as these growing businesses often present unique challenges. By catering to this type of company, we aim to create a solution that can be broadly applicable across various use cases.”

The OpenPhone team consists of 11 employees, with slightly over 25% being women and the same percentage identifying as non-white. Notably, four of the eleven employees are first-generation immigrants, including both co-founders.

Since the start of the pandemic in March 2020, the company reports a tripling of revenue and has facilitated over 7.5 million calls and more than 17.3 million messages since its inception.