FORTUNE -- Blue Jeans Networks this morning announced that it has raised a whopping $50 million in VC funding, to help expand its cloud-based, system-agnostic videoconferencing business. In other words, one videoconference participant could be using a Cisco telepresence system while another uses Skype while another uses just a basic browser.
Battery Ventures led the round, and was joined by existing shareholders Accel Partners, New Enterprise Associates and Norwest Venture Partners.
So we spent some time on the phone with Battery partner Roger Lee, who led the firm's investment. What follows is an edited transcript of our conversation.
FORTUNE: There are a number of cloud-based videoconferencing startups that have raised VC funding. Why are you backing Blue Jeans?
Lee: The reality is that we've become enchanted with Blue Jeans as a user of the product. We use a Cisco videoconferencing system in our offices, but every couple of weeks we were having breakdowns. If we were just using our room-based system, it was fine. Or if everyone was in one of our three offices it was fine. But if someone came in remotely via an iPad, or on Skype from a hotel room, we had trouble.
We tested a few different options and found Blue Jeans worked the best. So we began rolling it out more and more through different use cases within Battery. So we began to really know the company as a customer which led to the investment, and my passion for the business is borne out of my own pain and suffering using other systems.
I think it's a different business model. Those companies do a very good job selling very high-end equipment for room-based systems. If a Fortune 500 company is looking to outfit a conference or presentation room, telepresence apps will do a nice job. But if you need to outfit that room to handle hundreds of concurrent sessions or multiple conference rooms in various locations, then the existing telepresence solutions either break down or become prohibitively expensive. After all, you can't put that type of hardware in every room without burning lots of money.
Blue Jeans is offering cloud economics here. It's the same rationale businesses use when deploying servers or storage via Amazon (AMZN) Web Services. I can buy everything and do it myself, but it doesn't make financial sense.
But isn't the AWS user more like the Skype or Google (GOOG) Hangouts user, basically opting for the cheapest solution?
Some are, so perhaps it's not a perfect analogy. But the reality with videoconferencing is that today's businesses have multiple people on multiple platforms. Kind of similar to the voice world. Could you imagine a conference call where only people using Androids could participate, while people with iPhones were unable to connect? For videoconferencing, Blue Jeans removes that complexity. The hardware being used at the endpoint becomes irrelevant to participation and collaboration. And you're only paying per usage.
This is the company's fourth round of outside funding. Why didn't Battery invest earlier?
We knew about it, but didn't get the chance to look at it.
Do you view this as a "pre-IPO" round?
Yeah, I think so. These situations can certainly change, but the purchase of this round is to be the last one before going public.
What are most of the proceeds earmarked for?
Two things. One is to dramatically ramp up the engineering organization to keep improving product. Second is to significantly expand the sales and marketing footprint of the company. This includes international, where we need more resources overseas to expand the markets we sell into. The company is drowning in opportunities right now, and it's a matter of getting the right salespeople in place. So this is an upfront investment to fund that, because this is a company whose salesforce historically has very high efficiency.
Outside of not executing on plan, what's the largest challenge Blue Jeans faces?
I wish I had a more interesting answer, but it really is execution. This is a big market with obvious pain that has been artificially constrained because of how crappy the existing systems have been. All indications are that this is a really transformative business growing at an extraordinarily rapid rate with market receptiveness, so it's really more about execution than outside factors.
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Matt Jacobson leaves Battery Ventures for Iconiq Capital.
FORTUNE -- Matthew Jacobson has stepped down as a vice president with Battery Ventures, which he had joined just over one year ago after having served as CEO of Groupon's (GRPN) New York operations.
His next job appears to be with Iconiq Capital, a multi-family office that has participated on investment rounds for such private companies as SurveyMonkey, BlackLine Systems and Flipkart.
In an out-of-office MOREDan Primack - Sep 16, 2013 4:37 PM ET
Another VC firm cools on cleantech
FORTUNE -- Jason Matlof has quietly stepped down as a partner with Battery Ventures, Fortune has learned.
He had joined the firm's Silicon Valley office in early 2005 to focus on greentech and enterprise infrastructure investments. No specifics yet on his destination, except that it is expected to be an operating role (he had been VP of marketing and biz dev with Neoteris prior to joining Battery).
Matlof's portfolio companies had included MOREDan Primack - Sep 14, 2012 1:11 PM ET
While we wait for First Round Capital to send out its annual holiday video (I had heard it was coming later today), the folks over at Battery Ventures have sent over its own offering: An online game called Whack-A-VC.
Sadly it doesn't appear that the whack-able VCs are specific people, but rather just stereotypical cartoons (angry guy, powerpoint guy, etc.). But it's the thought that counts. Go here to play.Dan Primack - Dec 20, 2011 12:35 PM ET
Biofuel startup Qteros has laid off CEO John McCarthy and most of its other Boston-area employees, Fortune has learned.
The Marlborough, Mass.-based company was founded in 1996 as SunEthanol, with a focus developing and commercializing cellulosic ethanol. It raised over $35 million in venture capital funding, from such firms as Battery Ventures, Venrock, Long River Ventures, BP (BP) and Valero Energy (VLO). There also was a Dow Jones report in July MOREDan Primack - Nov 17, 2011 2:45 PM ET
Morgan Jones is out at Battery Ventures, which he joined more than 15 years ago as a general partner.
Jones quietly transitioned to a senior advisor role earlier this year, after having led the firm's industrial technologies practice. His portfolio company board seats were Achronix (field programmable gate arrays), Nova Instruments (measurement systems for fluid and solid mechanics) and Nova Metrix (testing and geotechnical instrumentation).
Past deals included Nova Analytics (acquired by ITT), MOREDan Primack - Sep 23, 2011 3:06 PM ET
While we wait to find out if Jack Dorsey really is returning to Twitter full-time, here's some other personnel scoop from the micro-messaging juggernaut:
Satya Patel has quietly stepped down as a Silicon Valley-based partner with Battery Ventures, in order to join Twitter.
I don't yet know what his new job title is, but wouldn't be surprised if it has something to do with advertising (i.e., monetization). Prior to joining Battery in MOREDan Primack - Mar 24, 2011 11:04 AM ET
Lots of venture capital firms are raising growth equity funds to, in part, buy secondary stakes in hot private companies like Facebook and Twitter. Battery Ventures, however, is not one of them.
I only bring it up because peHUB seems to have misinterpreted Battery's recent filing for a $173 million "Opportunity Fund."
A source familiar with the situation says that the pool actually is part of Battery's internal wealth management program, in MOREDan Primack - Mar 7, 2011 11:24 AM ET
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