uTest raises $43M and changes name to Applause

Photo Credit: PR
Photo Credit: PR

uTest  Israel, which offers crowdsourced software testing services, announced today (Tuesday) the completion of a $43M series E round. The current funding round was led by Goldman Sachs, together with all the company’s previous investors, including QuestMark Partners, Scale Venture Partners, Longworth Venture Partners, Egan-Managed Capital and Mesco.

As part of the current round uTest plans to change its name to Applause. The name change comes as part of an expansion of the company’s operational purview to include analytics, a move that began about a year ago.

Investing strategy

The company plans to use its latest funding to upgrade and expand a range of services that correspond with the new vision of the company. Among these services the company plans to expand its testing service In-the-Wild, which allows for testing in real environments wheer products are expected to operate. In addition, the company wants to bring qualitative examinations of 360 brands worldwide.

In January of 2013 the company launched Applause, a tool intended to give users, enterprises, developers and marketers the possibility to analyze and track the popularity of their various applications in accordance with the opinions and reviews posted on various app stores. As part of the company’s new vision and focus on a variety of existing tools, Applause will offer a set of tools and analytics that allow key stakeholders within the company, including developers, QA, product managers, marketers, and of course the management team, to better understand what users want with regard to the experience of using the product and the product itself. In essence, Applause plans to help companies produce the best apps for their clientele.

In addition, the company plans to increase its distribution channels through strategic partnerships and global expansion with a focus on markets in Europe and Asia. Despite the name change, the name uTest will not go away anytime soon and in fact the company plans to leverage it for its community of crowdsourcers in relation to paid projects. The company plans to offer training in channels, certifications, writing and reading reviews on different testing tools on the market, job search boards and display related events.

Photo Credit: Shutterstock
Photo Credit: Shutterstock


Defining the vision

In an interview with Geektime, Doron Reuveni – Co-Founder and CEO spoke about the rebranding decision saying, “This expansion of our vision is a part of our natural growth. Users are familiar with the uTest as a software testing service provided by the community. But we do a lot of things in addition to crowdsourced testing to help our clients, whether they’re startups or large organizations. We help them get applications to market that their customers will love.

So we focus on a number of things: Field testing with the help of the community, analytics based on app store feedback, tools that test environments and production and that enable for the discovery of bugs and more.

By combining these elements our customers get something that does not exist on the market elsewhere: Inside/out, full quality assurance. That is, they get real feedback from the field and the real world. Whether it’s bugs, crash analysis, app store reviews; and this is all part of our greater vision.

As part of this vision, the old name was no longer appropriate so we decided to go with the name Applause. It’s also a major strategic change but it helps to expand and better describe what we do today. However, it’s important to clarify that the brand uTest will not disappear but will become the more focused brand of our crowdsourcing community.”

Before this funding you raised $37M dollars and now you completed a round of $43M

“Just by looking at the type of investor – Goldman Sachs – this is certainly indicative of a certain direction of the company. This is a time where we’ll have to scale, make sales and shift to the new name, so it is likely to take a good year or two until all this happens.

“We’re working within a market worth $20B. We want to establish a company that will lasts and that does billions in revenue. We want to invest in M​​&A activity in an aggressive manner in order to complete the elements that we need in development and accelerate our vision. Of course we want to increase sales and marketing over the next two years and we plan to grow substantially by opening up offices around the world, expanding the sales force and creating more partnerships with distributors.”

Applause lives in the world of B2B SaaS and as such, measures itself in terms of customer satisfaction, growth in ARR and the like. Reuveni explains that there special metrics to measure companies of this size because when companies of this size have 12 month forecast their measurements are for more concrete than when a small startup makes a forecast for a similar time frame.

Regarding the selection of a lead investor for the current round Reuveni notes that, “As CEO I spend my time talking with bankers and investors. When the representative from Goldman Sachs sat in my office I was impressed by what he did in the past and his abilities to help the company reach its next level. So we decided to go with them believing they were the most strategic fit.

Your domain is based on the community. You may, at one point, experience a lack of labor force and that’s something you can’t control

“This can happen. In Fact, for Lionbridge, their community of translators decided to go on a kind of strike. But when you manage a workforce of 100K you can do much more and the chance for something like that happening is low. In fact, in most cases community members organize together to help, not the other way around.

We refer to our reviewers as working all things – paying them twice a month, they know when payday comes and this element is very important for us. In fact, we have an internal staff in charge of just this task. We have a vice president who oversees the community and is responsible to represent the community within the company. I agree that if we do not treat them well then problems may arise.”


Photo Credit: Shutterstock
Photo Credit: Shutterstock


You’re looking to expand with regard to M&A?

“We want to complete the missing elements we already have today in Applause. While we have a lot of tools, there are holes in our ALM and Analytics. Some holes we patch through partnerships with external companies but there are still elements that need to be completed through acquisition or merger because we want be responsible for the entire process. Additionally, we’re looking for potential adoption of small companies that operate in a similar way or have similar market representation in Crowd Testing.”

Do you have plans to expand outside the mobile world and the Web?

“We already perform tests on game consoles and smart TVs, as well as the software running inside cars. We notice that the differences between buying one car or another primarily comes down to the software that comes with it since most cars and manufacturers have already shown that they’re reliable. An additional field that’s strong today is Speciality Hardware where you can find companies such as Garmin, Adidas, Runkeeper, FitBit and others – and that’s before we talk about smartphones.”

uTest was founded in 2008 by Doron Reuveni and Roy Solomon. Their offices are based in Israel and the US with development centers in Poland and Hertzeliya. The company has raised $80M and tested more than 30,000 Builds for 2,000 companies including well known names like Google, Microsoft, Amazon, USA Today, Rolex, Box and Runkeeper. Its community has over 10,000 testers. 20% of its clients are international outfits outside the United States.

Photo Credit: Shutterstock / Multicolored diversity of people in globe mapCrowd of small symbolic 3d figures joined by lines





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