With a $20 million series B round announced today, Pendo is making an otherwise subdued venture capital year for North Carolina technology a bit more exciting.
Pendo is the Raleigh startup led by a Rally Software vet with a mission to help companies build better and more useful products. It has amassed a staff of 70 in new downtown Raleigh digs since raising an $11 million series A round in October 2015.
One of its key investors is Battery Ventures, which made the intro that led to lead investor Silicon Valley venture fund Spark Capital getting involved.
And that firm’s leadership role helped Pendo close a series B several months early and set aggressive goals for 2017. The three-year-old startup will double the size of its team and continue to accelerate engineering, marketing and business development efforts.
“We saw there was a lot of interest and thought it would be a good time to get it done,” says CEO and co-founder Todd Olson.
Pendo’s funding is among the five largest in the tech sector in North Carolina this year, confirms CED. It’s also one of the state’s biggest tech stories in a pretty slow year for venture funding. According to CED’s Innovators Report, technology companies brought in just over $171 million by the end of the third quarter, a figure far from 2015’s total of $517 million. North Carolina tech companies raised nearly $262 million in 2014.
There were 30 technology deals in the first three quarters of this year, compared to a total of 108 in all of 2015, the report says.
For Olson, winning Spark Capital as an investor is a chance to share a portfolio with the biggest names in tech. Spark is an investor in Trello, Medium and Slack, all companies with a similar focus to Pendo—helping consumers of technology have great experiences with it.
Also a win is Pendo’s new board member, Spark Capital partner Megan Quinn. She’s a former product manager at Google and director of products at Square, who previously worked as a venture capitalist at Kleiner Perkins.
“We sell to product managers and my background is a product manager, so it’s exciting to bring in another person who has a lot of understanding of what we do and the pain for customers,” Olson says.
As a side note, Quinn is married to M.G. Siegler, a partner at Google Ventures. The pair has been named a “Silicon Valley power couple” and rising stars in venture capital.
Local companies have embraced Pendo’s software—Dude Solutions, K4Connect, FoodLogIQ, Maxpoint, Zift Solutions and Citrix Sharefile are all customers. But the big story of 2016 has been the interest of large enterprise customers, some of which are publicly traded. AOL, FICO and Neustar are among the big international customers Pendo can disclose.
Olson attributes those wins to the strength of his sales team, as well as Pendo case studies. Client MemberClicks, for example, was able to improve its search functionality and onboarding process after revelations about the way users navigated its site and surveys as improvements were made.
2017 will be all about lining up more and larger customers, and hiring the right team to do so.
Already on the docket for staff positions: a vice president of customer success and supporting roles along with several engineering, product management and sales positions.
Olson says the search for some of those positions will be local and national. Candidates are flown in every month for interviews, as it continues to be a struggle to find engineering and top senior level talent in the Triangle, he says.
That certainly didn’t deter Spark though, Olson says. While some investors balked at a software company in Raleigh, Quinn hopped on a plane “in a moment’s notice” to meet his team, learn about his business and get the deal done.
“There’s no question that (being in NC) does limit your venture options in some cases,” Olson says. “But the people who are really interested in your business will come and check it out.”
