In the daily blizzard of new venture rounds announced each week, it is hard to stand out. Sometimes a founder is well-known, attracting attention to their company’s new investment. Or, a startup’s investors are respected, helping drive media interest in their latest investment.
And, sometimes, it’s all about OKRs.
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Ally, a Bellevue-based startup, announced its Series B this morning, a $15 million round led by Tiger Global. The OKR-focused software startup raised a Series A in July (it was announced in August), an $8 million round led by Accel. That makes Ally’s Series B a rapid-fire deal led by a firm that normally writes much larger checks.
I had to figure out what was going on.
Ally founder Vetri Vellore worked at Microsoft in the past, explaining the location of his new company. (Microsoft is headquartered in nearby Redmond.) But despite spending north of a decade at the software giant, Vellore wanted to build a company on his own.
So, he founded Chronus, a company that he later sold to a private equity shop. Chronus focused on mentoring, incidentally, something that Vellore said he received lots of at Microsoft and that he considers having “super-high ROI.”
Vellore’s interest in how people work included reading up on how product development has changed, namely how the software development model has changed from the “waterfall” method (big, irregular releases) to the “agile” method (smaller, rapid-fire releases).
Hunting for other models concerning how business might change, Vellore ran across OKRs, a neat method for corporate planning that companies seem to mainly execute in spreadsheets. As anything currently done by spreadsheets is an opportunity for a SaaS play, he founded Ally.
“OKR” is an acronym for “objectives and key results.” The concept is famous (thanks to Google) and somewhat simple to understand if tricky to execute. An objective is a goal that the company thinks will bring it closer to its mission. Each objective has a number of key results, achievable targets that are usually approached over the next quarter.
A candy company that wants to become the most beloved confectionery in the world might have an objective to delight its customers with new treats. It might then set up key results for that objective, like the invention and sale of three new packaged delights in the quarter, the maintenance of its current customer satisfaction scores across its entire line, and the addition of a new membership model to further entrench itself into consumers’ sweet tooths.
Each key result should be trackable as the quarter progresses, helping the OKR-guided company in question grade itself as it works towards its objectives. At the end of the quarter, each key result is graded, giving each objective a final score.
It’s simple enough in theory. In practice, setting intelligent OKRs is harder than you’d think (our candy example is terrible and unfocused, for example; I could use another americano), and getting employees to not only participate in the planning model but regularly track their efforts against their key results can prove irksome.
Ally wants to make all this a bit easier. By integrating into Slack and other daily-use tools, the company wants to help “ease people into OKRs” according to Vellore, helping employees create intelligent objectives and key results and keep them updated.
So far it seems to be working.
Three Rounds, One Year
Rewinding, Vellore told Crunchbase News that Ally raised a $3 million Seed round in January. That was followed by its $8 million Series A this summer and today’s $15 million Series B. Asked why he raised again, and why Tiger Global had led such a comparatively modest round, Vellore said that Lee Fixel, who took part in Ally’s Series A, introduced the company to someone at his former employer (Tiger Global).
The introduction went well, and Ally wound up raising $15 million now instead of what Vellore hypothesized could have been a $30 million round in a year and a half.
Translating all of that into something understandable, Ally’s Series A investor introduced him to someone at a huge hedge fund who decided to put money into Ally quickly as it looked like an attractive bet. In 2019, rapid-fire venture rounds ahead of normal timings aren’t rare.
Ally has big aspirations. Saying that it wants to build a sort of “operating system” for how businesses run, Ally is hiring quickly (doubling its headcount in Q3) and growing its customer base (100 new customers in the same period).
Now it has even more money, and if there is any company that should be good at planning its next steps, it’s Ally. Let’s see what the company can get done now that it is — surely — done fundraising for a bit.
Correction: An earlier version of this story indicated that Lee Fixel worked for Accel. It now accurately reflects that he took part in Ally’s Series A which Accel led, but was not part of the venture firm during the deal.
Illustration: Li-Anne Dias.
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