A Company Called Mmhmm Just Raised $100 Million
(Bloomberg) -- When Phil Libin created note-taking app Evernote in 2007, he was making a bet that smartphones would be the next big thing. Now, he has a new company built around what he thinks is the next transformative trend: video chat.
Libin’s new company Mmhmm Inc. (yes, that’s its legal name), is a souped-up video communications service. It works alongside existing companies such as Zoom Communications Inc., and will soon function as a standalone product, building in more features than traditional video software. On Wednesday, Libin plans to announce that Mmhmm has raised $100 million from investors led by SoftBank’s Vision Fund, with participation from Sequoia Capital and others.
“Video has always been the most expressive way to communicate, but it hasn’t been the easiest,” Libin said. Mmhmm wants to change that by building on the pandemic ubiquity of video communications services like those run by Zoom, Microsoft Corp.’s Teams and Cisco’s Webex. The growth of video communications tech is poised to create the foundation for a generation of new businesses, Libin said, likening the potential to the rise of smartphone-propelled companies like Instagram.
Mmhmm works by creating a virtual camera that acts as a go-between linking a computer’s own camera—and in coming weeks, a smartphone’s—and whatever video service it is running. In layman’s terms, it takes the existing video software and adds its own flourishes.
For example, Mmhmm gives a speaker the ability to keep talking in front of slides, newscaster style, rather than relying on a screenshare feature for presentations. The software also allows presenters to create text slides within the app, rather than importing them, and mix prerecorded messages with live discussions in a fluid way. Users can turn on a function that records their side of the video, allowing presenters to replay what they just said and interact with the clip, point by point.
“It feels like you’re narrating it” in person, said Matt Yalowitz, who helps lead the sales team at Stripe Inc. and has been using Mmhmm since April, after a friend forwarded him a video of Libin demonstrating the features. Yalowitz, who was speaking personally and not on behalf of Stripe, says he typically thinks of himself as a late adopter to technology, and has enjoyed more tech-savvy colleagues asking him about how he pulled off various video stunts.
As for the vowel-free name, Libin said he’s wanted to call a company Mmhmm for years. When consultants for his new project couldn’t come up with anything better, he stuck with it.
Mmhmm grew out of Libin’s All Turtles, a startup incubator. He began building it in May 2020 and won an initial investment of $4.6 million in June. A $31 million investment followed in October, led by Sequoia, which also previously backed Evernote and Zoom. Although it started as simply a way to make video calls more fun, the company’s ambitions have ballooned.
Using Mmhmm, Libin said, teams might eliminate update meetings—with individuals recording their portions for colleagues to watch when it suits them, perhaps at 1.5 times speed. Live meetings can be reserved for strategy and other sessions that benefit from real-time brainstorming, making them shorter and more productive. Libin estimated that Mmhmm is saving him 90 minutes a day.
Libin is inclined to talk philosophically about the startup’s capabilities. “It’s this way of breaking the tyranny of linear time,” he said.
It also makes possible timely ripostes. When a reporter asked a tax-related question that Roelof Botha, the lead Mmhmm investor from Sequoia, didn’t want to answer, a GIF of actor Steve Carell’s character from “The Office” popped up over Botha’s shoulder, closing his eyes and shaking his head.
Video is already a competitive industry. But Mmhmm considers the current reigning champion, Zoom, to be a partner, and works compatibly with its and other video companies’ software. Zoom has been encouraging developers to build software based on its app. In April, it unveiled a $100 million fund to invest in such startups—a commitment Mmhmm believes signals Zoom won’t try to find a way to stop it.
The bigger risk could come if Zoom builds copycat features into its own offerings. Mmhmm’s investors say that possibility doesn’t bother them. “We’re betting on the brain of this collective team to always stay three steps ahead,” said Lydia Jett, the partner at SoftBank who led the investment and who will take a seat on Mmhmm’s board. Anita Sands, a visiting professor of entrepreneurship at Princeton University, will join as an independent director.
Of course, it remains unclear how much workers will keep depending on video now that many are returning to offices. No matter how effective Mmhmm and other services are, screen-fatigued employees might go out of their way to avoid them.
Yet investors have signaled a continued willingness to back video startups. Recently, companies like Hopin have raised substantive amounts of venture funding. Mmhmm’s corporate customers currently include Axel Springer Porsche APX and Cisco Systems Inc.
Other investors in Mmhmm’s latest funding round include existing backers Mubadala Investment Co., Human Capital and World Innovation Lab.
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