4Voice to double in size this year after nexVortex buy, CEO says

13 March 2020 - 10:58 am UTC

by Kyle LaHucik in Chicago

4Voice, a cloud-based phone and texting service provider for small and medium-sized businesses, will nearly double in size following its first-ever acquisition and sees the uptick in remote work as a significant growth driver this year, said CEO and co-founder Amruth Laxman.

The Boca Raton, Florida-based company acquired nexVortex’s hosted voice business unit earlier this month for an undisclosed price. As a result of the deal, the company expects to grow two-fold, projecting between USD 5m and USD 10m in revenue by the end of 2020, Laxman said. 4Voice, bootstrapped since being founded in 2007, has historically grown at about 20% year-over-year and has been profitable "for a while," the CEO said.

The acquisition of nexVortex expands 4Voice’s geographic reach from 20 states to 40 states, Laxman said. Moving forward, Laxman said the company is focusing on integrating the deal, as well as leveraging growth opportunities from the impact of COVID-19—the novel coronavirus declared a global pandemic by the World Health Organization this week.

4Voice is working “to help drive” the trend in working from home and has seen an uptick in customers leaning into its remote working solutions in recent weeks, Laxman said. Companies with legacy phone systems are looking into cloud-based platforms such as 4Voice as they are being forced to consider remote working as a result of the coronavirus outbreak, he said. According to Laxman, employees of the nexVortex business unit that 4Voice acquired were already part of the working from home trend.

4Voice focuses on Voice over Internet Protocol (VoIP). The company’s products deliver cloud-based phone communications to small and medium-sized businesses in retail, food service, finance, healthcare and other industries.

Services include: session initiation protocol (SIP) trunking; private branch exchange (PBX) systems; centrally hosted servers for call centers; and SMS texting services for businesses to send and receive texts from business numbers on a mobile device or desktop.

The acquisition of nexVortex was financed internally and was the result of a years-long relationship between the companies, Laxman said. Reva Capital served as financial advisor on the deal, Laxman told Mergermarket. Reva Capital will continue working with 4Voice as an advisor on the integration and other services, Laxman added, noting there is not a focus on making additional buys.

4Voice will also grow through the addition of resell partners and expansion of channels-based sales, Laxman said. The company will look to expand its partnerships within the telecom industry to broaden its client base, the CEO added.

Laxman declined to speculate on an exit, noting the company is focused on scaling as a “viable business for the long term.” 4Voice’s ownership is evenly split among its four co-founders: Laxman, Chief Operating Officer Dimitri Verzhinski, business development leader Stuart Rubinstein and CFO Harold Forman.

Competitors in the business cloud communications space include privately held, North Miami, Florida-based IPFone and Newark, New Jersey-based net2Phone, a subsidiary of IDT Corporation, Laxman said. Most recently, net2Phone acquired Murcia, Spain-based business communications provider RingSouth for undisclosed terms in December 2019. Last week, IDT reported Net2Phone's 2Q20 revenue was USD 12.9m, a 12% increase over 2Q19.

Lewis Brisbois served as legal counsel for the nexVortex acquisition.