The new CEO of super-private messaging app Wire, which is backed by Skype's cofounder, expl...

02-17 17:43
New Wire CEO and former Huddle CEO Morten Brøgger
Morten Brøgger/Wire
  • Morten Brøgger is the former chief executive of Huddle, a rival to Box and Dropbox, and oversaw its sale to private equity firm Turn/River last year.
  • Brøgger has now joined Wire, an encrypted messaging startup backed by Skype cofounder Janus Friis.
  • Wire launched as an encrypted video and messaging app for consumers, but has pivoted to focus on secure enterprise messaging.
  • Brøgger has a track record of becoming CEO of a firm, then overseeing its sale — but he thinks this is a long way off for Wire.
  • In an interview with Business Insider, Brøgger gave more detail on the Huddle sale, and outlined his plans to turn Wire into a secure rival to Slack.

Last time Business Insider wrote about Morten Brøgger, he had just quit as chief executive of Dropbox rival Huddle , shortly after overseeing its sale to private equity firm Turn/River.

As of December, Brøgger is chief executive of Wire, the encrypted video and messaging app backed by Skype cofounder and fellow Dane Janus Friis.

Wire initially made its reputation as a secure alternative to WhatsApp, Telegram, and Signal. The idea was to build a Skype for the modern age — a concept made more convincing by Friis' involvement. But in July, Wire announced "teams beta," a secure enterprise chat service to rival Slack and newer services like Keybase .

This was a clear move to try and make money. In an interview with Business Insider, Brøgger described Wire as "pre-revenue" — meaning it doesn't make any cash — and said it had more than one million downloads.

The company's finances to date are still a mystery. Friis is the firm's main backer through a collective called Iconical, a group of engineers, designers, and entrepreneurs. Iconical has never disclosed how much funding it's put into Wire.

Brøgger is tasked with getting Wire's enterprise business off the ground, and told Business Insider he is in the early stages of hiring more sales staff inside Europe and North America.

Could Wire be up for the sale soon too?

A quick glance at Brøgger's LinkedIn profile shows that the last two firms he headed up — Huddle and mobile services firm MACH — were acquired not long after he became CEO.

Is a sale on Wire's horizon too, even if it's not making money?

"You're right — with my track record, I'm a hired gun and not a founder," he said. "I love working with interesting companies, to see if you can bring them into a healthy position. If it's private equity or venture backed, it will end with a sale. These are not shareholders who are forever shareholders.

"Right now [a Wire sale] is fairly unlikely — down the road it's absolutely an opportunity," he added. "My track record is being part of company transactions, but that was not really discussed during interviews with [Wire's] board, executives and shareholders. But I'm sure it's part of my CV they had put into their evaluation somewhere. Right now it's all about growth."

Under former chief executive Alan Duric, Wire focused on becoming a secure communications service that might be useful to activists and journalists. But there's more money to be made from enterprises, and the idea is to take advantage of the cultural shift triggered by tools like Slack which, among other things, promise a better alternative to email.

Brøgger sees an opportunity in Slack's lack of end-to-end encryption — though he is modest in his ambition against his rivals. According to statistics from September last year, Slack has more than six million daily users .

"I'm not going to try and lure them into the battlefield, and take them head on — they would roll over me," Brøgger said of the competition. "We would like to be a credible and attractive alternative, we want to be shortlisted every time an enterprise is picking their future collaboration tool."

He points to Wire's strong credentials in voice, citing Friis' direct involvement. He also said the company is compliant with Europe's strict new rules around data privacy, the GDPR.

"If you have a call or a group conference call over Wire, everything is encrypted. I don't think Cisco or GoToMeeting can match that," he said.

As of yet, he isn't in a position to give financial targets for the first quarter. "I have agreed not to set objectives until the end of Q1 — we've only just pivoted. Right now it's about finding out where to put more marketing and sales people to accelerate. We're growing, and have lots of leads."

In a statement to Business Insider, Janus Friis said it made sense to target enterprise messaging.

"Wire's potential is very strong," he said. "The enterprise messaging market is large, and Wire offers higher levels of encryption, transparency and feature quality for enterprise customers.

"Wire isn't just about replacing another app, it's about creating something new — a modern solution that works for all devices, protects peoples' privacy, and doesn't rely on advertising or user data. Wire's transparency, its open business model, and its focus on security through end-to-end encryption are differentiators."

The fate of promising enterprise startup Huddle has been a mystery — until now

Last August, Business Insider reported that Huddle was being sold off to San Francisco private equity firm Turn/River . One source pegged the deal at $89 million (£68 million). The deal was confirmed later that month and Brøgger, still Huddle's chief executive, said Huddle would continue trading.

By December, Brøgger had not only quit his job to go to Wire, he had taken chief operating officer Rasmus Holst with him. Chief technology officer Stuart Cochran also quit for a new job at education company BridgeU.

"I left Huddle simply because the opportunity at Wire was something I couldn't refuse," Brøgger told Business Insider in an interview in January. He had worked with Holst prior to Huddle, at mobile services company MACH. "We liked working with each other — I brought him with me into Huddle. We got approached as a team, we looked at each other [and asked if] it was something we wanted, and we both said yes."

As for Huddle's position, Brøgger said: "It was time for Huddle to find some new shareholders to help in the next phase of its life," he said, adding that he "absolutely did not" leave because the firm was in financial trouble. "When I left, we were profitable and things were actually okay.

"After eight or nine years of being VC-backed, and having brought the company to break even, I think both in terms of the ownership structure and for myself, it made a tonne of sense to find new shareholders, new ideas, and new know-how to increase the growth."

He added: "I had a mandate to sell Huddle if we could find a relevant buyer, and we worked with an investment bank who had advised them. And if we didn't have a suitable buyer, we had existing shareholders who had committed to fund the business."

Brøgger wouldn't comment on Huddle's current financial position. In April, the firm reported that it needed to find $5 million or a buyer to keep its creditors happy.

Business Insider understands that the firm has more cash in the bank after the acquisition, and that its new shareholders have cleared its existing debts.

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