Pendo’s Engagement Software Clicks With VCs, Sparking $11M Round
Pendo, a company whose software helps companies glean insights about their customers by analyzing their Web behavior, has raised $11 million in a Series A round of financing.
Battery Ventures led the round, joined by Salesforce Ventures and existing investors Contour Venture Partners, Core Capital Partners, and IDEA Fund Partners. With Pendo’s new financing, Battery General Partner Neeraj Agrawal joins the Raleigh, NC-based company’s board of directors.
Pendo’s software is based on the idea that each click visitors make on a company website indicates their usage of a particular feature, preference for a particular item, or adoption of a new release. The software platform captures users’ Web behavior and reports data about that behavior to companies. Understanding how customers use a website’s features, Pendo says, allows companies to take steps to better reach them. For example, Pendo’s software can help companies deliver more personalized experiences for their customers with targeted messaging within the application.
The new funding comes nearly one year after Pendo raised $1 million in seed financing. In a blog post, Pendo CEO Todd Olson said that his next steps for growing the company after the seed investment were inspired by an article by Brad Feld, in which the managing partner of Foundry Group explained that each change a software-as-a-service company makes is an incremental search to figure out how its product fits in the market—the elusive “product/market fit.” After extending last year’s seed funding, Pendo spent the first half of the year growing its customer base one company at a time. In doing so, Olson said, Pendo also increased the breadth and depth of usage of the software within the customer base. The growing customer interest sparked interest in the venture capital community, leading to the Battery Ventures investment. Olson said the Series A funding represents Pendo’s achievement of product/market fit.
Olson, a veteran of Rally Software in Raleigh, co-founded Pendo in 2013 with entrepreneurs bringing experience from Google, Cisco Systems, and Red Hat. At CED’s Tech Venture Conference in September, Olson said that the company launched its software in the fourth quarter of 2014. Pendo’s more than 40 customers include SciQuest (NASDAQ: SQI), a Morrisville, NC-based company whose software automates spending, sourcing, and inventory; and Neustar (NYSE: NSR), a Sterling, VA-based company that provides real-time analytics on industries including telecom, finance, and media. Pendo’s SaaS offering doesn’t require client companies to do any coding. Pendo says its platform is hosted on Google’s infrastructure and now processes more than 1 billion events per month.
With the capital infusion, Pendo now plans boost its sales and marketing efforts to add even more customers and grow its 40-employee headcount. The Pendo website currently lists 11 job openings.
Photo of Raleigh skyscape courtesty of Flickr user Patrick Connelly via a Creative Commons license.