Jul
21
2021
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Andreessen Horowitz funds Vitally’s $9M round for customer experience software

Customer success company Vitally raised $9 million in Series A funding from Andreessen Horowitz to continue developing its SaaS platform automating customer experiences.

Co-founder and CEO Jamie Davidson got the idea for Vitally while he was at his previous company, Pathgather. As chief customer officer, he was looking at tools and “was underwhelmed” by the available tools to automate repetitive tasks. So he set out to build one.

The global pandemic thrust customer satisfaction into the limelight as brands realized that the same ways they were engaging with customers had to change now that everyone was making the majority of their purchases online. Previously, a customer service representative may have managed a dozen accounts, but nowadays with product-led growth, they tackle a portfolio of thousands of customers, Davidson told TechCrunch.

New York-based Vitally, founded in 2017, unifies all of that customer data into one place and flows it through an engine to provide engagement insights, like what help customers need, which ones are at risk of churning and which to target for expanded revenue opportunities. Its software also provides automation to balance workflow and steer customer success teams to the tasks with the right customers so that they are engaging at the correct time.

Andreessen approached Davidson for the Series A, and he liked the alignment in customer success vision, he said. Including the new funding, Vitally raised a total of $10.6 million, which includes $1.2 million in September 2019.

From the beginning, Vitally was bringing in strong revenue growth, which enabled the company to focus on building its platform and hold off on fundraising.

“A Series A was certainly on our mind and road map, but we weren’t actively fundraising,” Davidson said. “However, we saw a great fit and great backing to help us grow. Tools have lagged in the customer success area and how to manage that. Andreessen can help us scale and grow with our customers as they manage the thousands of their customers.”

Davidson intends to use the new funding to scale Vitally’s team across the board and build out its marketing efforts to introduce the company to the market. He expects to grow to 30 by the end of the year to support the company’s annual revenue growth — averaging 3x — and customer acquisition. Vitally is already working with big customers like Segment, Productboard and Calendly.

As part of the investment, Andreessen general partner David Ulevitch is joining the Vitally board. He saw an opportunity for the reimagining of how SaaS companies delivered customer success, he told TechCrunch via email.

Similar to Davidson, he thought that customer success teams were now instrumental to growing SaaS businesses, but technology lagged behind market need, especially with so many SaaS companies taking a self-serve or product-led approach that attracted more orders than legacy tools.

Before the firm met Vitally, it was hearing “rave reviews” from its customers, Ulevitch said.

“The feedback was overwhelmingly positive and affirmed the fact that Vitally simply had the best product on the market since it actually mapped to how businesses operated and interacted with customers, particularly businesses with a long-tail of paying customers,” he added. “The first dollar into a SaaS company is great, but it’s the renewal and expansion dollars that really set the winners apart from everyone else. Vitally is in the best position to help companies get that renewal, help their customers expand accounts and ultimately win the space.”

 

Jun
25
2019
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Orderful nabs $10M from A16Z to modernise the B2B supply chain network

The march of globalization continues unabated, and with it comes a growing demand for companies of all sizes to communicate with and sell to each other, regardless of the distance or any other barrier. Now, a startup that has built a platform to help them do that better and more cheaply is announcing a round of funding to capitalize on the opportunity. Orderful, which aims to modernize supply chain management through an API-based cloud service, has raised $10 million in a Series A from Andreessen Horowitz.

The new funding comes on the back of a previous seed round from Initialized Capital and a period of time mostly bootstrapping the business. It will be used to continue building out more functionality on the platform and to continue to expand the network of partners using it. Today there are 1,000 retailers, 10,000 vendors and 5,000 carriers on Orderful’s platform, but even that still only represents a small part of the wider industry of businesses that buy, sell and transport components and full products from A to B.

To understand the problem that Orderful is trying to fix, a little rundown on how supply chain management works today is helpful. In the old, pre-computer days, all information exchange happened by way of phone, fax, post, and documents that often were delivered along with goods, which all required manual assessment and recording.

The rise of computers and the internet did push that system into the digital world, but only just: electronic data interchange (EDI), as this general area is known, is a loosely organised set of technical standards to use computers to communicate this data between businesses to enable purchases, make accounting reconciliations, and transfer shipping details.

It’s a business that has boomed with the growth of globalization and companies trading with each other at an increasing pace. Supply chain management software is a market that ballooned to $14 billion in value in 2018, according to Gartner. Incumbent leaders include the likes of SAP, Oracle and JDA.

The problem is that EDI is actually not as easy as it ought to be. It’s a hodge-podge of standards, you usually need a team of specialists to integrate the services at each end point, and it doesn’t allow for a wider network effect that you might get from being “online” with one supplier already. All of that translates to it being actually quite slow and expensive.

Erik Kiser, the founder and CEO of Orderful, found and identified this inefficiency while he was working as one of those specialists, realizing that with the rise of APIs, large database technology and cloud-based software-as-a-service, there was an opportunity to build a new kind of platform that could do everything that EDI did, but on a supercharged basis.

Marc Andreessen (co-founder of A16Z) coined the phrase ‘software will eat the world,’ Kiser noted to me, “But actually software eats software sometimes, too.”

The idea behind Orderful is that it has created a series of APIs that can adapt to whatever systems a business is already using, in turn “translating” that business’s product and other data into information that can be imported into the Orderful platform to in turn be picked up by buyers, sellers, and shippers.

(In other words, there is no expectation of ripping out legacy systems, but simply creating bridges to migrate what is already there to newer and better platforms.) This also brings down the operational costs of hiring teams to build and potentially run EDI integrations.

“EDI predates the internet, and there are not many digital protocols that we use today that are pre-internet,” David Ulevitch, the partner at Andreessen Horowitz who led the investment and joined the board, said in an interview.

“Orderful, and Erik, recognised that as more commerce was becoming digital, there needed to be a better way to do all this. There is currently no SaaS company out there addressing this and removing the friction. It provides velocity between distributors and producers because when you connect once you can then trade with a number of partners. Time is up for EDI.”

While there may be no direct competitor to Orderful at the moment, there are a lot of potential players that I can see posing a challenge down the line (or potentially working with or even buying Orderful if not). They include the incumbents in supply-chain management like Oracle, SAP and the rest.

But also companies like Amazon, which has built its own EDI alternative (or version, you might say) that is used for its own management of suppliers. The company is very well known for building for itself, and then productizing, but for now Kiser says that it’s a partner, and customers can interface and sell to Amazon on Orderful using its APIs.

One thing that Amazon is instructive about, though, is when considering how Orderful’s data trove could be used for more analytics and business intelligence down the line.

“I don’t think companies not doing business with Amazon will be inclined to use its platform for trading,” Kiser said. “But they do have a lot of information about their network.”

Indeed, he pointed out that it’s been said there are some 30 economists at the company looking at its B2B supply chain data, and considering how it can be parsed for example to predict inflation.

“They are already using the data. With Orderful we have the opportunity to be the most influential software company if we can be the plumbing that connects companies,” Kiser said. “There are a ton of services that we can add on the platform and that’s where we are going even if right now we are focused on the plumbing and simply making it easy to trade data.”

 

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