19-year-old software company AvePoint just raised $200 million to help customers leave Slack and go to Microsoft's fast-growing Teams app

Robert Galbraith/Reuters

Microsoft CEO Satya Nadella speaks during a Microsoft cloud briefing event in San Francisco, California October 20, 2014.

• AvePoint, a 19-year-old software company from New Jersey, just raised $200 million in Series C funding to chase a big opportunity in helping customers move to Teams, Microsoft's fast-growing chat app.
• AvePoint helps companies move to and manage Office 365 and other Microsoft cloud software.
• The company claims that its software is the best and only way to move to Teams from Slack, Microsoft's chief chat rival. It also provides tools for backing up Teams chats, and for the IT department to manage data privacy and control on Teams.
• In so doing, AvePoint says, it's making Teams more useful and usable to larger customers.
• Teams experienced explosive growth last year, reaching 20 million daily active users in November, putting pressure on rival Slack, which has 12 million daily active users.
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AvePoint, a New Jersey based startup that helps companies helps companies move to and manage Office 365 and other Microsoft cloud software, is making a big bet on Teams - Microsoft's fast growing chat app.

In fact, the company attributes the bright future of Teams, which has 20 million active users at last count and rising, to the reason why it raised $200 million in Series C funding led by TPG Sixth Street Partners, in a deal announced earlier this week.

What AvePoint does is put a layer on top of Office 365 to help IT departments enforce rules about what can be shared via Teams, Outlook, and other Microsoft apps. It also provides tools for shunting data from other services to Microsoft 365, like moving from Google's G Suite to Office 365, or from Slack to Microsoft Teams.

Those features make Teams more attractive to would-be customers, Tianyi Jiang, cofounder and co-CEO of AvePoint, told Business Insider. That's good for Microsoft and AvePoint both, he says.

"Once you start using [Teams], you have hundreds, if not thousands of teams populating everywhere and it becomes unmanageable," Jiang said. "So we're able to...handle all of that, essentially automate all of that and give companies that governance and control, so in return, we're increasing significant Teams adoption," Jiang added.

In fact, Jiang said, the company is investing heavily in helping its customers get the most out of Teams, helping to accelerate its spread.

"With the right technologies and right change management we can help people get onto Teams much faster and make better use of Teams," he said.

Pressure on Slack

The growth of Teams is a success story for Microsoft: In a little under three years since launch, it's achieved 20 million daily active users and rising, Microsoft said in November - aided by the fact that it's bundled into some Microsoft Office 365 subscription plans.

That's putting pressure on Slack, the smaller competitor that's credited with taking the workplace chat app concept to mainstream businesses.

At last count, Slack had had 12 million daily active users. However, Slack CEO Stewart Butterfield has also criticized Teams, saying its growth is not organic and that Microsoft uses "unsportsmanlike" tactics to compete in the workplace productivity space. Slack also highlights figures that suggest users are highly-engaged with its app.

Regardless, AvePoint provides what it claims is the best and only software tool to move from Slack to Teams, giving another pathway to growth for Microsoft's cloud and its own business both.

Pivot to cloud

AvePoint wasn't always so invested in the cloud business. It started in 2001, when major cloud software players like Salesforce and NetSuite were still unproven startups. At the time, it began by providing tools for managing SharePoint, Microsoft's still-popular intranet and file sharing tool.

Somewhere around 2014, though, AvePoint saw the rise of the cloud as a trend it could no longer afford to ignore. It figured that its expertise in SharePoint would translate into success in doing much the same thing for Office 365, which has a similar focus on team collaboration and file sharing.

"Six years ago...we decided to bet very big on Microsoft's cloud, specifically Office 365 because we correctly predicted that SharePoint is actually the underpinning essentially infrastructure for all of the modern collaboration that is Office 365," Jiang said.

More broadly, AvePoint will use the new funding to add 40,000 customers, help support the company's growth overseas in UK, Asia and Australia, and expand its product portfolio as Office 365 continues growing.

AvePoint has raised a total of $294 million in funding, including a $90 million round in 2014, led by Goldman Sachs. It's first round in 2006 was led by Summit Partners.

AvePoint has previously focused on large, enterprise customers. They're now starting to see more small to medium sized businesses because software is much more accessible for those smaller players now that it's in the cloud. Right now it has 60,000 enterprise customers, which Jiang said is about 7 million Office 365 users.

"Now the rest of the world's coming to us. It's a massive user base...we're talking about 80, 90 million users, and we need to scale our business to help accelerate and meet that demand," Jiang said.

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