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Since its inception in 2013, Pendo has raised a total of $106 million—the most money raised among software companies in the Research Triangle region since 2000, according to the company. New investors Geodesic Capital and FirstMark Capital also participated in the round, in addition to existing investors Battery Ventures, Spark Capital, Meritech Capital, and Contour Venture Partners.
The startup plans to use its latest capital infusion to expand in Europe in 2019 and enter the Asian market in 2020, according to CEO and Cofounder Todd Olson. It’s also planning to continue increasing its headcount. Pendo currently has 225 employees, 45 of which were hired during the second quarter. Olson expects that number to climb to 250 by year’s end with new hires in sales, marketing, and R&D. The company also plans to use the money to continue its expansion into enterprise markets having recently signed on some larger enterprise customers such as MetLife.
“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?” Olson asked. “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.”
Pendo’s customers include blue chip software companies such as Zendesk, Salesforce, and Citrix Systems as well as companies in other sectors such as Encyclopedia Britannica, Bright Horizons, and Henry Schein.
“A lot of companies are focused on sales or marketing but very few are focused on product,” Olson said. “This fundraise is a good example of why product is so critically important today, more than ever before.”
While Pendo is not yet profitable, according to Olson, it has a three-year CAGR (compounded annual growth rate) of 289 percent.
Olson believes the company’s growth has been driven by a combination of a rising subscription economy dependent upon recurring revenue and a “shifting balance of power” from digital service providers to end users.
Looking ahead, he said an IPO is one of the company’s long-term goals.
“It’s very premature or early to think about the company going public today but I think that as a company, we’re always trying to keep as many options open,” Olson told Crunchbase News. “It’s certainly an option to we hope to be on the table in the future.”
Rajeev Dham, partner at Sapphire Ventures, said in a statement that his firm sees a “massive opportunity” for Pendo to help any business with digital services develop better products “that foster superior user experience.”
Illustration Credit: Li Anne Dias
Editorial Note: A previous version of this article stated that Pendo plans to expand in Europe in 2018 and Asia in 2019. It has since been updated.