Eran Yaniv has been ahead of the curve before, but now he thinks his timing is right. And that could mean he enjoys another big startup payday by 2016.
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That’s because his automated mobile app testing firm with customers including Coca-Cola, Geico, and Staples, Woburn, Mass.-based Perfecto Mobile, is growing fast and will be ready for an IPO by then, according to a December 27 interview with Yaniv. As he explained, “We expect to grow 80% to 100% in 2014 and to keep doubling — hitting $100 million in revenue in a few years.”
Perfecto Mobile gives companies access to mobile devices in the cloud along with tools to automate the testing of mobile apps and to manage their quality. Perfecto Mobile makes money by selling subscriptions to companies based on the number of users – 90% of its customers are Fortune 500 according to Yaniv.
Yaniv has tended to be ahead of his peers. He said, “I was in a special program in Israel where I attended university for three years — got my degree in computer science — and then served in Army Intelligence for six years. I started Exalink — a maker of router-based Wireless Application Protocol (WAP) software — that was ahead of its time. In 2000, ComVerse Technology bought the company for $550 million in stock.”
Yaniv got rich and took some time off. “I spent a year and a half doing magic shows for kids. It really helped me to connect with people quickly — which is a very useful skill when it comes to raising money for a startup,” noted Yaniv.
But Yaniv could not stay away from the startup game. As he said, “In 2006, I cofounded Perfecto Mobile because I saw that mobile would explode — even though it was a year before the iPhone was introduced. I noticed that instant messaging in Israel for AT&T didn’t work in the US. And an Irish company that employed hundreds of people was doing remote testing on feature phones. I saw that mobile app testing needed to be automated.”
Unfortunately, Yaniv was very early to market. “We were early to market and then the 2008 financial crisis hit. Those first two and a half years were creative but difficult. But in 2009 and 2010, things started to take off. Everyone was our customer. In our business plan to estimate the size of the market, I saw that there would be spending on mobile apps in many industries — such as travel, video, finance, insurance, oil and gas, and manufacturing,” said Yaniv.
He did not know which segments would take off but it turned out that oil and gas was one of the big ones. Argued Yaniv, “In the oil and gas industry there are tens of thousands of people from Baker and Halliburton in the field using mobile. Demand for our services really started to take off.”
Perfecto Mobile has grown fast in recent years. Said Yaniv, “We started with a pre-seed round of $250,000 to prove our concept. Since then we have raised $35 million and now employ 130 people — about half in Israel doing R&D and the other half mostly in the U.S. near Boston. We are doubling our revenue year over year and we think that our addressable market — when taking into account our services including testing, quality monitoring, and security — is $8 billion to $9 billion.”
Yaniv thinks that Perfecto Mobile will be able to stay ahead of the competition and go public. “When we first started, there was not much competition. We are now seeing competitors but we can stay ahead by investing in R&D, broadening our service portfolio, and tapping the benefits of our mobile quality management partnership with Hewlett Packard.”
It remains to be seen whether Yaniv’s magic skill will extend to allowing him to transform Perfecto Mobile investors’ money into IPO riches.