Just seven months after announcing a $20 million Series B funding round, Pendo, a platform that helps businesses better understand their customers, has closed a new $25 million Series C led by Meritech Capital Partners. This significant investment brings the company’s total funding to $45 million and highlights its rapid growth in a short period.
Pendo’s Explosive Growth
With offices in San Francisco, New York, and Raleigh, Pendo has grown to 106 employees since its inception. The company’s ability to adapt quickly to changing market conditions is evident in its impressive growth rate. Meritech’s Rob Ward will be joining the Pendo board of directors to help guide future acquisitions and an international expansion strategy.
Understanding Customers through Data
Pendo offers a tool that enables companies to track key customer metrics, providing valuable insights into how users engage with products and services. The company is orienting itself around the rise in interest in satisfaction metrics like net promoter scores (likelihood to recommend products to others), which are often used as a proxy for projecting revenue.
Early Customers See Significant Results
Some of Pendo’s early customers, such as Cisco Cloud, have seen a 20 percent increase in their net promoter scores since using the platform. This significant improvement demonstrates the effectiveness of Pendo’s solution in helping businesses better understand and engage with their customers.
Using Data to Inform Product Decisions
With data from Pendo, companies can determine the best ways to engage with users to get feedback. The team has found that allowing feedback within products increases response rates considerably compared to other channels like email. As Todd Olson, founder and CEO of Pendo, explained: "We went wide first. A large part of our roadmap is looking at each of our core pillars and adding more depth."
Pendo’s Product Roadmap
Pendo helps product managers analyze products with polls, contextual analytics, in-app guidance, and walk-throughs. The company’s team has discovered some surprising stats in its own course of product development, such as customers typically only spending 10 hours in a 30-day trial testing a service. Armed with this knowledge, the company can offer value to its clients by telling them what users actually engage with during a trial to inform future product design decisions.
New Funding Opportunities
The extra capital from Meritech will enable Pendo to engage more freely in M&A activity, allowing the company to snap up smaller competitors and augment its technology. This strategic move is expected to accelerate Pendo’s growth and solidify its position in the market.
Founder Todd Olson on Pendo’s Growth
Olson insists that it was Meritech that took the initiative in making the deal happen. "Meritech approached me, and they were insistent with their interest in leading a growth round," he explained. This significant investment from Meritech is a testament to Pendo’s potential for continued growth.
Conclusion
Pendo’s $25 million Series C funding round demonstrates the company’s rapid growth and its commitment to providing innovative solutions for businesses to better understand their customers. With this new capital, Pendo is poised to accelerate its expansion plans, both domestically and internationally, further solidifying its position in the market.
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About the Author
John Mannes is a student at the University of Michigan.
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