Prospectus Summary
This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary may not contain all of the information that you should consider before investing in our common stock. You should carefully read the entire prospectus, including “Risk Factors” beginning on page 6 and the financial statements and related notes beginning on page F-1, before making an investment decision.
SoundBite Communications
SoundBite Communications is a leading provider of on-demand automated voice messaging, or AVM, solutions. Using a web browser, organizations can employ our service to initiate and manage customer contact campaigns for a variety of collections, customer care and marketing processes. Our service is designed to help organizations increase revenue, enhance customer service and retention, and secure payments by improving their customer contact processes. Our service is designed to improve a contact center’s efficiency by increasing the productivity of contact center agents and facilitating the use of “agentless” transactions.
We provide our service through a multi-tenant customer communications platform that allows us to serve a large number of clients cost-effectively. To use our service, an organization does not need to invest in or maintain new hardware, pay licensing or maintenance fees for additional software, or hire and manage dedicated information technology staff. As a result, a new client can begin using our service within a few days. We provide our service under a usage-based pricing model, with prices calculated on a per-minute or per-message basis. Because we implement new features, complementary services and service upgrades on our platform, they become part of our service automatically and can benefit all clients immediately. Our platform is designed to scale securely, reliably and cost-effectively. Clients used our service to place nearly 1 billion calls in 2006, and our service currently has the capacity to initiate more than 14 million calls each day.
Since January 1, 2006, our on-demand service has been used by more than 200 organizations in a variety of industries, including the collection agencies, financial services, retail, telecommunications and utilities industries. In 2004, we began concentrating our sales and marketing activities on the collection process, and more recently we have targeted collection agencies and debt buyers in the collection agencies industry as well as large in-house collection departments of businesses in other industries. Our sales force focuses on demonstrating the benefits of an on-demand solution and the potential return on investment from the use of our service. Our client base includes 14 of the 20 largest collection agencies in North America (based on 2006 revenue). Our revenues totaled $7.8 million in 2004, $16.4 million in 2005 and $29.1 million in 2006.
Industry Background
Improving the customer contact process is a key strategy by which businesses, governments and other organizations achieve their goals and objectives. Organizations rely on combinations of in-house and outsourced resources to execute inbound and outbound customer communications campaigns using a variety of channels such as direct mail, e-mail, text messaging, web and voice. The efficacy and cost-effectiveness of each channel vary dramatically, depending on whether the channel is being used for marketing, customer care or collections.
The ubiquity and familiarity of the telephone make it a highly effective medium for all types of customer interactions, but organizations historically have encountered significant challenges in managing the individuals required to execute a telephone campaign. For most large organizations, in-house or outsourced contact centers are the hub of customer service efforts and are responsible for managing a wide variety of customer communications campaigns. Contact center agents are expensive to hire and train, are capable of handling only a limited number of calls per hour, and routinely spend time unproductively by, for example, speaking with the wrong individual or waiting to connect with a customer.
End box 1 END LOGICAL PAGE PAGEBREAK BEGIN LOGICAL PAGE Begin box 1In an effort to improve contact center efficiencies, organizations have invested in automation technologies such as predictive dialers, with varying degrees of success. Predictive dialers improve agent productivity by increasing the percentage of time an agent spends talking and can deliver consistent one-way communications without agent involvement. However, predictive dialers require a significant upfront investment and fail to address the inherent inability of agents to provide organizations with the consistency, customization and uniform quality typically required for an effective campaign. Moreover, the vast majority of predictive dialers have been installed on premise, and they face substantial challenges in responding to technological advances such as the routing of contact centers’ voice traffic using Voice over Internet Protocol, or VoIP, telephony.
As a result, many organizations continue to search for a more comprehensive solution to improve the outbound communication process. In the past few years, AVM has emerged as a potential solution to the critical issues facing contact centers. Based on our review of third-party reports and other information, we estimate that the market for AVM solutions will increase from $370 million in 2005 to $1.4 billion in 2010, representing a compounded annual growth rate of 30.5%. An AVM solution must increase contact center efficiencies not only by further increasing the productivity of contact center agents, but also by facilitating “agentless” interactions where appropriate.
Our On-Demand Service
We believe our use of an on-demand delivery model addresses the growing demand for enterprise and other software that is delivered on a usage basis, rather than purchased or licensed. A May 2006 IDC report, for example, estimates that the market for on-demand software, of which the market for on-demand AVM solutions is a subset, will grow from $2.0 billion in 2005 to $4.6 billion in 2010, representing a compounded annual growth rate of 18.0%.
Using a web browser, clients use our service to initiate and manage campaigns for a variety of collections, customer care and marketing processes. We assist clients in selecting service features and adopting best practices that will help them make the best use of our service. We selectively offer performance and predictive analytical capabilities to assist clients in improving the design and execution of their campaigns. Our platform is designed to scale securely, reliably and cost-effectively in order to help our clients collectively deliver millions of calls per day.
We believe our clients achieve a demonstrable return on investment because our service improves their contact center productivity without the need for an investment in hardware or software. Key benefits of our service for clients include:
Lower total cost of ownership. Clients using our service can achieve significant savings relative to on-premise systems. Our service does not require clients to invest in or maintain new hardware, pay licensing or maintenance fees for additional software, or hire and manage dedicated IT staff. In addition, because new features and upgrades are implemented on our platform, they become part of our service automatically and benefit clients immediately.
Improved contact center agent productivity. Our service improves agent performance by screening wrong parties, answering machines and other non-productive calls, which constitute a majority of outbound calls. As a result, an agent using our service can handle approximately three times as many customer interactions each hour as an agent using a predictive dialer.
Enhanced agentless interactions. Clients can avoid the expense of contact center agents by using our service to automate certain customer interactions. Some interactions are well suited to a structured dialogue that can be predicted and then scripted in advance. For example, automated payment of a subscription renewal or overdue credit card payment can be facilitated without agent intervention.
End box 1 END LOGICAL PAGE PAGEBREAK BEGIN LOGICAL PAGE Begin box 1Burstable capacity. Our service leverages a multi-carrier telephony backbone with the ability to initiate more than 600,000 outbound calls each hour. This capacity enables clients to “burst” extremely large campaigns during short time periods, when customers are most likely to be at home.
Rapid service deployment and campaign modification. A new client can initiate its first campaign using our service in a period as short as a few days, using only its existing telephony equipment and Internet connections. New clients avoid the delay associated with installing the hardware and software required for an on-premise system.
Usage-based pricing model. We provide our service under a usage-based pricing model, with prices calculated on a per-minute or per-message basis. This pricing model limits the risks of adoption of our service by clients and assures clients that we have a strong incentive to provide expected benefits consistently.
Our Strategy
Our objective is to become the leading global provider of on-demand automated customer contact solutions. To achieve this goal, we are pursuing the following:
Our History
We were founded in Delaware in April 2000. Our principal executive offices are located at 2 Burlington Woods Drive, Burlington, Massachusetts 01803, and our telephone number is (781) 359-2200. Our website address is www.soundbite.com. The information on our website is not a part of this prospectus.
SoundBite is our registered service mark in the United States. All other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners.
End box 1 END LOGICAL PAGE PAGEBREAK BEGIN LOGICAL PAGE Begin box 1The Offering
The number of shares of our common stock that will be outstanding immediately after this offering is based on 58,192,088 shares outstanding as of March 31, 2007 and excludes:
callerid=999 iwidth=450 length=84Except as otherwise noted, the information in this prospectus reflects:
The information we present in this prospectus does not reflect a reverse split of our common stock that we may effect prior to the effectiveness of the registration statement of which this prospectus forms a part.
End box 1 END LOGICAL PAGE PAGEBREAK BEGIN LOGICAL PAGE Begin box 1Summary Financial Data
The following tables summarize our financial data. You should read these data together with the financial statements and related notes appearing elsewhere in this prospectus, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the other financial information included elsewhere in this prospectus. Pro forma information in the following tables gives effect to the conversion of our outstanding preferred stock into common stock upon completion of this offering. The pro forma as adjusted information in the balance sheet table further reflects (a) our sale of shares of common stock in this offering at an assumed initial public offering price of $ per share, after deducting the estimated underwriting discount and offering expenses payable by us, and (b) our application of the proceeds from our sale of common stock in this offering. Working capital is defined as current assets less current liabilities.
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