Splashtop Pivots To Unicorn Status

San Jose, California-based Splashtop took the scenic route to becoming a unicorn, but the remote work company hit the billion-dollar valuation mark with its closing of a $50 million funding round.

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The round was led by Sapphire Ventures and includes participation by other long-time investors Storm Ventures, NEA and DFJ DragonFund.

The new round is the company’s first since 2010, before it pivoted to its current cloud-based remote access offering that allows workers to connect to devices and applications while out of the office. The company saw 160 percent growth last year, as COVID-19 made remote work a necessity for many.

“We have become an essential product for business continuity,” said co-founder and CEO Mark Lee.

The long road

Founded in 2006, Splashtop started as a fast-boot browser offering for netbook computers. However, Lee said it became clear as laptops evolved and the mobile market grew, Microsoft, Google and eventually Apple would dominante the space and a pivot would be needed.

About eight years ago, the company shifted to remote access, deciding not to raise more money at the time because they knew it would be a down round, Lee said.

The shift seems to have paid off, as the company has been profitable for the last four years and has annual recurring revenue of more than $55 million, Lee said. The company competes not only with other remote access providers such as LogMeIn and TeamViewer, but also security and VPN providers such as Cisco, Juniper Networks and Fortinet, he added.

Jai Das, president and partner of Sapphire Ventures, said investing again in Splashtop was an obvious decision considering the company’s growth, as well as the growth of the market for remote access.

“People need to be able to login from their mobile device and work,’ Das said.

COVID-19

The pandemic only has grown the market for the company’s solution, Lee said. While Splashtop saw a lot of its sales directed toward the small business segment before COVID-19 hit, mid-market enterprises now make up about  20 percent to 25 percent of the company’s sales.

Lee said Splashtop will use its new money to continue to move sales upstream, as well as add to its 200-employee team and possibly even make acquisitions.

The company has no predetermined exit, but an IPO is a possibility as the company continues to grow, Lee said. The company has been approached by private equity firms looking to buy for the last two to three years, and even has been solicited by SPACs, Lee said.

“We like to back companies of consequence,” Das said. “They have the ability to be that.”

Illustration: Li-Anne Dias.