Resilio Takes on the Enterprise with Non-Dilutive Financing
TIMIA Capital announced a US $3 million investment facility for Resilio, San Francisco-based software company in 2019. One year later, our team caught up with Resilio CEO, Eric Klinker, to learn about the company’s bootstrapping culture and find out more about its exciting growth plans for the future.
Where it All Began
Eric was the President and CEO of BitTorrent Inc. for eight years before launching Resilio, a separate entity based on a portfolio product called BitTorrent Sync, and focused on the enterprise market.
“We knew early on in the BitTorrent Sync journey that we had a very strong value proposition for enterprise customers,” said Eric. “The rationale for the separate company was that it’s very difficult to have a consistent go-to-market that serves both the enterprise and the consumer space.”
Today Resilio is primarily focused on the enterprise but it maintains a tech-focused consumer and SMB offering to tap into a strong community that aids in the go-to-market for their enterprise product.
Solving Enterprise Customer Problems
Resilio delivers powerful solutions using a unique private cloud software built on core mesh technology. Today, the company’s mission is to make big data available at the edge—wherever end customers and employees interact—making it effortless to synchronize, distribute, collect, and collaborate across clouds and at every endpoint.
Resilio serves large scale enterprise businesses by solving two main challenges.
Firstly, Resilio helps enterprises in the media and gaming industries to solve their “big fast data” challenges. As a result, almost every large gaming company is a customer of Resilio’s today, and Resilio is very commonly used in media post-production.
“The media assets these companies use in R&D or production processes are getting larger and larger and their workforces are becoming ever more distributed,” said Eric. “For example, a new computer game may require engineers and professionals in 30 offices around the world to collaborate on the same large data set. Resilio is the glue that brings those locations together, distributing builds in a very fast and scalable way.”
Secondly, Resilio helps enterprise customers perform at the edge of the network, which is a very difficult place to operate. For example, logistics or transportation companies, as well as large scale retail (e.g., Quick Service restaurants), may have thousands of locations or vehicles that are very difficult to reach yet are part of data-driven workflows managed from a central location. “Resilio brings reliability and resilience to the edge of the network,” said Eric.
Bootstrapping for Steady, Deliberate Growth
From the vital experience gained at BitTorrent, the Resilio team hit the ground running with a clear product-market fit on day one. This allowed rapid customer acquisition almost from inception and a unique opportunity to reinvest customer revenue very early on.
“All of our growth has been bootstrapped. The strength of the products in the market determined the rate at which we could grow,” explained Eric.
The company maintained the employee base that their revenue allowed and, as revenue grew, the team hired more people.
“Our first priority was always the product and supporting our customers. We were launching a new enterprise product category in the market so R&D required most of the resources early on” said Eric. “Once the enterprise product launched, our second priority was to invest in sales and marketing to drive growth.”
Eric’s team knew that if they could put more capital into their already proven product, they could accelerate Resilio’s growth so they decided to research some non-dilutive capital options.
“It takes a long time to build an enterprise business—flash in the pan enterprise businesses are rare. They take capital and a very consistent go-to-market strategy,” said Eric. “We wanted to expand our go-to-market for the enterprise, which is very capital intensive, and TIMIA has supported us as we’ve done that.”
Non-Dilutive Capital for Better Options Down the Road
“We’re looking for a slow-and-steady-wins-the-race kind of approach with Resilio,” said Eric. “SaaS is great for that. Every month and every quarter is incrementally better than the last. For good products and good teams, SaaS businesses will have a good exit eventually, you just have to be patient with them. For those reasons, we look for backers with a longer timeline in mind.”
Since Resilio has a deliberate, steady growth strategy, the team prioritizes customer value proposition over unsustainable growth.
“We were interested in non-dilutive financing. We researched several vendors but we just liked TIMIA the best,” said Eric. “They’re very supportive of the business and helpful with introductions throughout the portfolio. You get a lot of extra support, alongside the capital.”
The company decided to hold off on venture capital—at least for now. “There’s nothing wrong with the venture capital route,” said Eric. “However, when you’re venture-backed, there can sometimes be too many voices in the boardroom and it can be difficult to get a consistent view about where the company should be heading.”
There is always an option to take venture capital down the road and, by taking non-dilutive financing now, Resilio will have a better valuation and more favorable equity financing later.
“If there is an equity round, we’ll be in a better position,” said Eric. “If there isn’t an equity round, we’ll be in a better position for an exit or M&A. Either way we’ll be in better shape with TIMIA than we would have been otherwise.”