Open source web conferencing startup Dimdim, headquartered in Burlington, Massachusetts, with development operations in Hyderabad, recently raised $6 million in Series B funding from Draper Richards and existing investors Index Ventures and Mumbai-based Nexus India Capital. In its first round, the company had raised $2.4 million. The company, which has three products just out of beta — Dimdim Free, Dimdim Pro and Dimdim Enterprise — employs 19 people across its offices in the US and India. Co-founder and CEO, DD Ganguly, who sold his first company AIM Inc in 2001 to Computer Associates, spoke to Startupcentral about how the company will deploy the fresh funds, revenue streams and the curious story of how Dimdim came to be known by its name. Edited excerpts:
You’ve raised venture money in a difficult fund-raising environment. How tough was it?
In our case it was not so difficult because we were not actually planning to raise money at this point of time. Because Dimdim has a lot of traction in the open source community and after our launch a lot of venture capitalists came to us. Our plan was to raise money a few months later into the year. But since venture capitalists started speaking with us around December…we were just having casual conversations at the time…we got multiple term sheets in this difficult environment.
You have an interesting mix of investors — two based in the US and one in Mumbai. What does this combination bring to the table?
If you look at the investors collectively — Draper Richards, Index Ventures, Nexus India Capital — the three have very rich experience in collaboration software and also in open source software. Naren Gupta from Nexus, for instance, he sits on the board of Red Hat. Nexus is a cross-border firm and the gentleman who is on our board, Suvir Sujan, sits in Mumbai. Then Draper Richards has invested in both Hotmail and Skype. And finally Index has invested in Skype and a number of open source companies.
How do you plan to deploy the $6 million?
It will be used primarily for increasing our marketing efforts. Two, getting in place a bigger sales force in place. It is really about market expansion at this point of time. Our product is in place…so we’re really going out now and focusing on the business aspects.
You’ve spoken about a premium product in the press. Could you elaborate?
If you look at Dimdim today, there are three flavours to it, three deployment options in which the product is rolled out. The first is Dimdim Free, which itself rolls out in two different variants. One is an open source community edition and the other is a free hosting edition. You don’t have to pay us anything at all. The second product is Dimdim Pro and the third product is Dimdim Enterprise. Now Dimdim Enterprise is a version of the software which can either be installed on the customer’s own hardware or the person can install it on his server and then he can provide services to his customers or it can be a dedicated hosted service where the customer is not sharing infrastructure with any of our other customers.
How are Pro and Enterprise priced?
Dimdim Pro is extremely affordable. It is $99 per year. It is very attractively priced so that we can really capture this market. If you compare it with what competition provides, it is a fraction of that cost. Dimdim Enterprise starts at $2000 per year and it scales up…normally the customers that we’re closing right now, it works out to $15,000-$17,000 per year.
Are you also exploring other revenues streams?
In the Dimdim Free version, we are offering a free audio conferencing service. It is free to the end customer but on the back-end, the service providers give us a certain revenue share. In future we may look at revenues from advertisements.
How do you split operations between the US and India?
What we have done is quite different from what most other companies have done. Not only do we do development in India, we are also doing sales and marketing out of India. The three large divisions in the company — engineering, marketing and sales — are all small global divisions. Some people are in the US, some people are in India. We will grow similarly even as we scale the organization…keep the nature intact. So, for example, we have done all our sales out of India till now and now we are adding on some folks in the US.
How did the name Dimdim come about?
First or all, Dimdim has nothing to do with my initials. We had started the company with a different name and 5-6 months had rolled by and after that I realized that it was high time to change the name. We collected about 15,000 names from a domain name service provider. And we said that we are not going to leave this room until we have finalized a name. We made a few rules. One, the name has to have high recall. If you listen to it once, it should go into your system. Nobody should have difficulty remembering the name. Second, it would have to be an international name. For example, my name, Debdatta, cannot be pronounced in most countries. Even outside Bengal most people cannot pronounce it. I was very sensitive to that. I was clear that even in Japan people should be able to pronounce it. Third, the transmission from the sound to the spelling had to be completely clear. Fourth, the transmission from the spelling to the sound had to be clear. Dimdim was the only name that survived all the rules.
Photo Courtesy: Dimdim