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Existing backers Accel, True Ventures, Ludlow Ventures and Work-Bench all participated in the investment, which brings the startup’s total raised since its 2017 inception to $45.4 million, according to Crunchbase. The round comes just nine months after Catalyst closed on an Accel-led $15 million Series A, and values the startup at $125 million, according to sources familiar with the transaction.
Like many startups, Catalyst was born out of a need. Co-founder Edward Chiu had led a customer success organization for another startup, DigitalOcean, from scratch. (By customer success, by the way, Catalyst means giving a business the means to mobilize their customers, measure satisfaction and grow their business.)
“We went from zero to $200 million almost without a sales team,” Chiu recalls. “My team built an internal tool to solve a problem. And we did solve it by supporting a fast-growing company with significant revenue and a significant customer base.”
Encouraged by that success, Chiu showed the tool to “a bunch of customer success leaders,” who told him it was better than what they were paying hundreds of thousands of dollars for. So he enlisted his brother Kevin Chiu to start Catalyst with him. Raising a seed round wasn’t difficult, Chiu told me, because they already had a proven product.
Fast-forward to today, and the brothers have continued to grow Catalyst exponentially. Since the close of its last round, the company has seen its annual recurring revenue increase by 380 percent, according to Chiu.
With the pandemic, Catalyst has seen an uptick in both usage and demo requests.
It raised the capital in part to continue to “take care of existing customers.” It also plans to put the money toward significant market expansion, scaling new employee growth and “further community building.”
What it does
Catalyst helps organizations aggregate all their data sources and convert them into a “beautiful dashboard,” offering a 360-degree singular view of customer health, according to Chiu.
The software “is not just used by a customer success team, but also by product managers to know what they should build next, and by marketing teams for case studies, and CEOs and CFOs to see which customers are doing well and which ones are not,” he told Crunchbase News via a Zoom interview last week.
Catalyst’s ability to close on a new funding round in the middle of a pandemic speaks to the importance of what the 35-person software-as-a-service company offers, Chiu believes.
“Every investor and CEO is focused on the retention of existing customers,” he said. “They want to make sure they are doing well and are very happy. That makes our software a necessary one, even at this time.”
In fact, McKinsey & Co. recently published a report on the importance of “adapting customer experience in the time of coronavirus.”
Catalyst has had a huge focus on user ease and design, and essentially “consumerized this enterprise experience,” according to Chiu.
“What takes 20 clicks on another platform takes two on ours,” he said. “What takes two months to ingest on another platform takes two minutes on ours.”
Customers are mainly software companies and include Domino Data Labs, Heap, Frame.io and LaunchDarkly.
“Our vision has always been to be the world’s largest customer experience company,” Chiu told Crunchbase News. “We see tremendous opportunity in expanding to sectors such as legal or health. We want to be able to serve any type of organization that has customers they want to manage, retain and improve their experience.”
Spark Capital General Partner Will Reed believes Catalyst offers the most intuitive workflow software for customer success teams.
“Given how important renewals and upsells are to software companies hitting their goals, it is surprising how few purpose-built tools have gained meaningful traction in the category, especially compared to vendors serving other revenue-driving functions like sales and marketing,” Reed told me.
Catalyst has built a product that Reed describes as “fast, responsive, easy to implement and easy to use.”
Its success lies in its ability to give customer success managers (CSMs) a single pane of glass to understand account health while its workflow automation tools allow them to “do their entire job in one place,” he added.
Blog Roll Illustration: Li-Anne Dias