Business Startups Venture

North Carolina’s Newest Unicorn: Pendo Raises $100M Series E

Raleigh, North Carolina-based cloud tech startup Pendo has raised a $100 million in a Series E round that gives the company unicorn status. The Series E, led by Sapphire Ventures, was raised just over 13 months after its $50 million Series D.

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New investors General Atlantic and Tiger Global Management, along with existing investors Battery Ventures, Meritech Capital, FirstMark, Cross Creek and Geodesic Capital, also participated in the financing. The round brings Pendo’s total venture funding to $206 million since its inception in 2013, according to its Crunchbase profile.

The company, per its website, aims to “understand and guide the entire product journey with a single (cloud-based) platform.” In other words, it wants to help companies build digital products that are easier to use with a SaaS (software as a service) model. Pendo operates under the premise that “many product teams still lack the basic tools they need to understand what their customers want, why customers come back, or what drives them away.”

“We help companies create software that users love. How often do people use software that is frustrating, confusing or can’t find what you’re looking for?” CEO and co-founder Todd Olson asked me when we talked at the time of Pendo’s 2018 raise. “Our whole value proposition eliminates those experiences. We help people get immediate value when they log into software. We believe that software is becoming a permanent part of our lives whether we’re purchasing new cars or experiencing some other digital experience.”

The company has seen impressive growth over time, noting a three-year CAGR (compounded annual growth rate) of 334 percent. It currently has more than 375 employees, up from 225 in September of 2018, across offices in Raleigh, New York City, San Francisco, London, Sheffield, United Kingdom, and Tel Aviv.

Also, Pendo says its bookings grew 108 percent in the second quarter over the same period in the prior fiscal year. The company now has over 1,200 customers, including Verizon, ADP, Cardinal Health, RE/MAX, LabCorp, Bright Horizons, Okta, OpenTable, Salesforce, Zendesk and the Michigan Supreme Court.

“A lot of companies are focused on sales or marketing but very few are focused on product,” Olson told me last year. “This fundraise is a good example of why product is so critically important today, more than ever before.”

Pendo founders: (Left to Right): Eric Boduch, Todd Olson, Erik Troan, and Rahul Jain

Earlier this year, Pendo completed its second acquisition with the purchase of UK-based Receptive.io. But according to the company, it won’t be its last.

Pendo says it will use the new capital “to accelerate global expansion through sales and marketing investments, and [accelerate] product development through engineering investments and acquisitions.”

When I interviewed Olson last year, he told me that an IPO was something the company was considering. So I asked Pendo if that was still in the works. Its answer: “Yes, it is. Pendo’s goal is to build a large, successful and independent company. Their business fundamentals, recent growth, product suite and leadership team have set the company on a path not only toward IPO but to be a dominant SaaS business for years to come.”

This marks the second large round raised by a North Carolina company in a matter of weeks. On Oct. 2, we covered North Carolina-based nCino, which has developed a cloud-based operating system for financial institutions, raising $80 million in a round of funding led by T. Rowe Price Associates Inc.

In October 2018, I took a look at North Carolina’s growing startup scene. At that time, we found that venture funding in NC startups was up 154 percent to $2.57 billion for the year compared to $1.01 billion in all of 2017,  according to Crunchbase data. Maybe it’s time to take another look.

Disclosure: Salesforce Ventures, an investor in Pendo, is also an investor in Crunchbase, the parent company of Crunchbase News. Crunchbase’s investors are listed as part of its Crunchbase profile. For more about Crunchbase News’s editorial policies on disclosure, see the News team’s About page.

Illustration: Li-Anne Dias

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