Openphone – Cloud Phone Switch of 2022 by Alexander Gornyi


The post was originally published in Russian on Startup of the Day. Alexander kindly agreed to republish what we think is of great value to our readers.

A long time ago, back in the 20th century, every white collar had a telephone standing on their desk, somewhere in the office’s server room there was a mini telephone switch. Then the telephone switch was moved to the cloud, the calls now went through the internet. One more step – and the telephone devices disappeared from office rooms, instead there is an app in a smartphone. The client calls by a number from the corporate website and reaches the sales staff’s personal iPhone. Here, the conversation gets recorded, correctly routed among dozens of the department’s employees, and in the nighttime there is a robot on the phone instead of a human. Everything is convenient, pretty, and polished until shiny through dozens of years.

The American segment leader is RingCentral. It went IPO in the distant year 2013 and its current stock value is USD 10B at the market share of 20%. The rest 80% is shared by smaller players. Among them – OpenPhone, the American startup of the day that battles the old folks for younger clients. It doesn’t have any revolutionary product, everything the same as everywhere else: cloud telephone switch, mobile app for accepting calls from a personal phone, routing, recording, automatic responses.

The difference is the price. RingCentral’s plans begin at 20 dollars per person per month, the recommended variant is 35 dollars. OpenPhone’s minimum is 10, and the premium is 20. It’s difficult to compare the features, but the newcomer might just have more of those.

The business remains profitable at such prices, it spends even less, the bites run along the wires almost for free. Ring Central’s gross margin is approximately 75%. If OpenPhone is twice cheaper, it will have 50% which is still good. That said, RingCentral as the market leader cannot get cheaper, this will immediately drop its live revenue, the stock exchange will not forgive something like that.

Also, OpenPhone has a more fresh-looking interface than the dinosaur, and it has integrations with trendy services like Slack and Zapier. Just what a new business needs – the old one will not move anyway, it’s too difficult to change the old-shoe tools.

OpnePhone brought in USD 40M in the April’s round.

#usa #roundb #tech #telephony

Translation: Kostiantyn Tupikov


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