CB Insights recently confirmed a fact many people in tech already know—the No. 1 reason startups fail is they don’t fill a market need.
Customers don’t want, or need, the product they’re building. They struggle to find product market fit—the holy grail of startup investment.
We hear anecdotally from customers that Pendo plays a significant role in helping them both achieve product market fit, and prove to investors that they have it. But, as a data-driven company, we wanted hard facts—do startups that use Pendo have a higher probability of raising venture capital? And, what role might Pendo play in their ability to raise funds, and ultimately to meet investor expectations for growth?
A Crunchbase analysis of venture-backed customers who have used Pendo for at least a year found that 50% raised a subsequent round of funding within two years of purchasing Pendo. On average, those companies raise their next round nine months after they start using Pendo. Pendo customers are nearly 18% more likely to raise a subsequent round of funding than the average startup.
Next, we considered the percentage of seed-funded Pendo customers that raised additional funds after acquiring Pendo. Series A fundraising is notoriously difficult—just 20% of seed-funded startups go on to raise a Series A round, according to Crunchbase data. Turns out, seed-funded Pendo customers are nearly 40% more likely to raise a Series A than the average.
These customers are avoiding the second most common reason why companies fail: running out of cash.
In the early days of Pendo, our founding team had the unique advantage of its own data to help achieve product market fit. Product usage metrics alongside qualitative feedback from dozens of customers lured inbound interest from investors.
We want more startups to have that same advantage. That’s why we’ve created a new offering for startups.
Pendo for Startups is available to Series A-funded startups, or those at an earlier stage, that have a web or mobile application. It includes Pendo’s core product usage analytics, in-app guidance and sentiment functionality, a trio of tools that can help startups on that quest to find product market fit, and to attract investors to fuel continued growth.
Find out if you qualify for Pendo for Startups here.