Photo: Waterloo Mayor Dave Jaworsky (left) was on hand today to help TextNow CEO Derek Ting (centre) celebrate the opening of the Waterloo company’s San Francisco office.

SAN FRANCISCO

Waterloo-based TextNow opened its new San Francisco office with a bang today, releasing some eye-popping metrics around the growth of its low-cost mobile phone service.

The 82-employee company, led by co-founder and CEO Derek Ting, announced revenues of USD$20 million for 2015, representing 75 per cent growth year over year. TextNow grew its subscriber base by 360 per cent in 2015 to roughly 50 million, and is currently seeing two million new users signing on each month.

“The growth we have experienced this year has been extraordinary, particularly because we are growing and expanding differently than most startups,” Ting said, referring to how TextNow (formerly known as Enflick) has not raised outside funding since its $1.5 million seed round in 2011. “We have been successful by proving we could take on the gigantic telecom industry, where the barriers of entry are intense, all while maintaining profitability.”

TextNow is a cloud-based service that combines Wi-Fi and traditional phone service to deliver a much cheaper mobile option to users, each of whom is issued a single phone number that can be used across different devices and platforms. Its growth since its 2009 founding has been steady and impressive, even though the company has flown largely under the radar.

The opening of a San Francisco office, which coincided with this week’s California mission by mayors from the Toronto-Waterloo Region Innovation Corridor, is meant to further accelerate the company’s growth, almost all of which has happened in the United States, where communications regulations are less prohibitive than in Canada.

David Samuel TextNow VC

David Samuel of Freestyle Capital speaks at the opening of TextNow’s San Francisco office on April 6, 2016. (Communitech photo: Anthony Reinhart)

To that end, the San Francisco office will be headed by Mark Braatz, who will serve as the company’s General Manager and Vice President of Growth. Braatz previously served as Vice President of User Acquisition at KIXEYE, a video game company where he directed more than $65 million in marketing investments and helped build nine-digit annual revenues.

Joining Braatz is Chas Castell, TextNow’s new Vice President of Revenue Operations. Castell previously headed mobile advertising at Scopely, the Los Angeles-based touchscreen entertainment network, where he drove exponential sales growth and more than doubled ad revenue on the company’s flagship app each year.

“It’s an exciting milestone for us,” Ting said in an interview in the sun-filled, industrial loft-style TextNow space at 300 Brannan Street, which came with an antique safe built into the wall. “We can’t wait to augment the talent here and the talent we have back home to create even more awesome growth. It’s very, very exciting times ahead.”

Staff at the new office will build the company’s capabilities in data science and business intelligence, “sort of like a crystal ball, so to speak, so that we can basically make really good business decisions,” Ting said, citing marketing investments as an example. TextNow hasn’t done any significant marketing in the past, and these new capabilities will enable it to accurately predict and track the return on marketing efforts.

The company chose San Francisco proper over nearby Silicon Valley due to the ongoing trend of tech companies moving back from the Valley into the city, where young tech employees increasingly prefer to work.

Asked how the new office will affect TextNow’s Waterloo operations and the broader Waterloo Region ecosystem, Ting said, “A lot of our people in Waterloo will end up spending time here, and the guys here will spend time in Waterloo, so there will be a lot of knowledge sharing, which is very exciting, because it’s knowledge that we didn’t have before in the company.”

TextNow team Jaworsky

(Left to right) Venture capitalist David Samuel, Waterloo Mayor Dave Jaworsky, TextNow CEO Derek Ting and Mark Braatz, the company’s new General Manager and Vice President of Growth, pose in front of an old safe that came with the San Francisco office. (Communitech photo: Anthony Reinhart)

Pointing to the company’s already impressive growth, Ting said, “I’m really excited to see what we can do with the guys here. It’s really, really kind of adding gasoline to the fire.”

Waterloo Mayor Dave Jaworsky, on hand for this morning’s low-key opening, couldn’t have been happier.

“I think this is a great way to augment talent and have a presence right here near Silicon Valley,” Jaworsky said. “There is some talent that is specialized and available here in San Francisco, which will allow a Waterloo company to expand, and that’s a great thing.”

Jaworsky was also pleased to meet David Samuel of Freestyle Capital, who led TextNow’s 2011 seed round. Samuel has investments in several Canadian startups and, like most Bay Area VCs, is well aware of the University of Waterloo’s reputation as a leading producer of tech talent.

“It was a great opportunity today to meet the VC for TextNow, and just to explain to him what we really have going on in the Toronto-Waterloo Region Corridor,” Jaworsky said. “It’s a story that needs to be told, and I think we’re doing a great job now of telling it. We need to get the message out there.”

About The Author

Anthony Reinhart
Director, Editorial Strategy
Google+

Anthony Reinhart is a veteran journalist who left the Globe and Mail to join Communitech in 2011. Tony has covered everything from crime, politics and courts to business, the arts and sports, and his writing has won numerous journalism awards. He is Communitech's Director of Editorial Strategy and senior staff writer.