Customer Success Company Totango lands $100M Growth Investment
TechCrunch By Christine Hall 29 September 2021
Totango, a company that helps SaaS companies track customer engagement to find and fix user flow errors and friction, announced Wednesday that it has raised $100 million in Series D funding, led by Great Hill Partners.
Existing investors BGV, Pitango Ventures and Canvas also participated in the round, which gives the company $132 million in total funding since the company was founded in 2010. The company’s last funding round was an $8 million Series C round back in 2016. It has previously raised $15.5 million in Series B funding in 2014 and in 2011, $3.8 million in Series A funding.
The San Mateo, California-based company’s no-code technology enables customers to quickly and continuously design, optimize and run their entire customer journey, including proactively detecting and resolving churn risks. It has proven out a return on investment for customers of over 23 points in churn reduction and 136% year-over-year expansion growth in revenue.
The past year has been a “super busy” one for Totango, Guy Nirpaz, co-founder and CEO of Totango, told TechCrunch. He says the company’s mission is to democratize customer success and simplify the process so that customers are getting value no matter what the product.
During that time, the company launched a free version of its customer success software, which resulted in thousands of companies being onboarded and seeing an increased growth of over 3x in annual recurring revenue, he added.
Meanwhile, the number of platform signups in the last six quarters grew month over month, something that Nirpaz said demonstrates a “huge market demand.” As such, the new funding will be invested largely into product, design and engineering to keep up with the rapid adoption.
Even prior to the pandemic, which drove many brands to focus more on customers, Nirpaz was seeing what he called “the revenue experience gap,” which is driving revenue targets on one side and a constant increase in customer expectations on the other.
“We’ve seen momentum like that before, felt that was what was missing and set out to make it simple to embark on that,” he said.
Chris Gaffney, co-founder and managing director of Great Hill Partners said his company started out as customers of Totango. It was clear in the pandemic that organizing customer success was an essential to moving forward, he added. As Great Hill looked for solutions for its own business, Totango’s ease of implementation stood out.
The firm’s investment strategy is built on an initiative of choosing a subsegment, like customer success, and evaluating businesses in that market.
“Totango jumped to the top of the list, based on ease of use,” Gaffney added. “When we evaluated the trends, we saw there would be great growth and adoption. It is clear to us that Totango had an unusual combination of platform technology and product. From the time of productivity to making money, they were the best at that, and that combination made them stand out.”