A Tale of Resilience: How WebEngage Transformed and Thrived
We’re excited to take you on an inspiring transformation journey of WebEngage — a marketing automation startup that started as a simple, user-friendly customer conversion tool and has grown into a leading B2B SaaS provider. WebEngage empowers marketers to take control of their user engagement and retention strategies, and its journey is packed with valuable lessons and insights. Whether you’re a seasoned entrepreneur or just starting, you’ll find something worthwhile to take away from their story. So, let’s dive in together and discover how WebEngage became a trailblazer in the marketing automation industry!
Beginnings👣
After completing his B.Tech. in mineral and metallurgical Engineering at IIT (ISM) Dhanbad in 2005, Avlesh Singh was motivated to gain knowledge on managing a website of significant magnitude from start to finish. This led him to join a startup at IIT Delhi’s incubation center, followed by another startup Burrp in 2006, where he was the first employee. At Burrp, his goal was to build an amazing consumer product and a top-notch engineering team. There, he met Ankit Utreja, who later became a co-founder at WebEngage.
Burrp was acquired by Infomedia, and Avlesh spent some time there. However, he was determined to pursue his entrepreneurial aspirations, so he tried a few experiments as side projects and discussed them with Ankit. Soon, Ankit also decided to join Avlesh in his entrepreneurial journey.
After considering several ideas, Avlesh and Ankit decided that their next venture should be in the B2B space. This decision was influenced by their previous experience with Burrp, which despite years of hard work, yielded little commercial success in the B2C space.
Inspired by the outstanding customer service provided by brick-and-mortar retail stores, the duo set out to create a virtual experience that could replicate the same level of personalization and assistance. Their goal was to offer personalized product suggestions, provide freebies, and deliver exceptional service, just like a helpful employee in a physical store would. However, creating a successful business requires more than just a promising industry and business idea — it’s crucial to understand the target customer persona.
After careful consideration, the duo decided to focus on marketers at consumer internet companies who often need some control over their company’s website, which is typically managed by tech and product teams. By empowering marketers, they hoped to foster online user engagement and conversions.
After a year of hard work, the duo launched WebEngage in 2011. Their offering was an intuitive tool that enabled marketers to create pop-ups and push notifications on their websites in real-time. Consumer internet companies used WebEngage to gauge the intent of users on the verge of making a purchase.
For example, if a user had spent significant time on an e-commerce website and added a product to the cart but hadn’t completed the transaction, WebEngage would show a pop-up. Depending on the product and its value, the pop-up could offer a discount code to incentivize the user to complete the transaction within a specific timeframe. Additionally, WebEngage included a user-friendly form builder that enabled websites to collect leads and follow up with potential customers, increasing their chances of making a sale.
WebEngage’s Initial Growth and Fund Raise 💸
Initially, the founders aimed to gain traction in the market, and although their revenue was minimal, their innovative marketing tool quickly gained popularity. The tool’s simple design, which only required a single code to be pasted on a website, made it easy for users to get started without any hassle. As a result, over a thousand installations were achieved in a short amount of time. Interestingly, startups like Ola, Paytm, Myntra, FirstCry, and Flipkart became early adopters of WebEngage.
This rapid adoption of the tool caught the attention of Rajan Anandan, then MD of Google India, who became the company’s first angel investor. His involvement added credibility to the venture, attracting more investors and supporting the company’s growth.
Challenges in Scaling Up the Business 📈
The company had a decent growth trajectory, with annual recurring revenue (ARR) peaking at around $2–2.5 million. At that time, the average annual contract value (ACV) was approximately $3,000. The company operated in this manner for four years, with half of its customer base in India and the other half in the US. However, as the market became more competitive, with around 10–12 companies vying for the same space, WebEngage found it challenging to differentiate itself. This market commoditization led to a situation where price became a more critical factor than product functionality, making it difficult for the company to scale up further or ask for more money from existing customers.
Avlesh says, “Our goal was to build a $100 million business, but selling a $3,000 ACV product made it impossible. Despite trying to enroll thousands of customers, scaling up to reach 30,000 customers in a crowded market was not a feasible option.” In light of this, the duo had to look at a different problem that could be solved at a higher price point, allowing them to achieve their goals with fewer customers.
Avlesh emphasizes that rushing to find solutions is not an effective approach. Instead, he recommends taking the time to understand the problem thoroughly.
As he puts it, “Success isn’t just about creating a great product. It comes from having the right customer insights.”
Therefore, it is crucial to step back and carefully examine the issue, those impacted by it, and how they are currently attempting to resolve it. Such examination must also encompass an analysis of the market size and the number of competitors present in the market. While this method may be time-consuming and require patience, it can provide invaluable insights for entrepreneurs, allowing them to develop more effective solutions.
After spending a year meeting with hundreds of customers to understand their challenges, Avlesh and Ankit realized that while startups often focus on expanding their user base for growth, long-term sustainability and profitability are only possible through user retention and repeat rate. They discovered marketers struggled to bring users back to their websites, mainly due to mounting competition.
While understanding the customers’ pain points, the duo also recognized that although their initial product effectively converted users, it failed to address the more significant issue of user retention. This realization prompted them to develop a new hypothesis and product in 2015 to tackle the problem head-on. As a result, the team strategically decided to transform WebEngage into a full-stack customer retention platform.
The Pivoting Process ▶️
The company’s transition from an SMB (small and medium business) focused SaaS product to a mid-market and enterprise-focused one was not a simple product pivot. Avlesh’s experience illustrates that a successful transition requires significant organizational changes beyond the product itself. Building new teams, unlearning old habits, and acquiring new skills are all necessary but difficult tasks during an organizational pivot.
In addition to changing the product, the company also had to adjust its marketing, service, and sales strategies to fit the needs of its new customer personas. The team had to adapt to a completely different market when they shifted from selling a low-value product with easy integration to a high-value product with complex integration. Avlesh and Ankit had to train their team for six months to adjust their mindset and start asking for higher prices.
The transition proved to be a challenging time for several reasons. Firstly, changing the business focus led to confusion among external parties, making it difficult to find new investors. Furthermore, the company encountered several obstacles for a year, including critical financial situations, the loss of customers, and unsuccessful buy-out attempts.
Avlesh reflects, “It was a tough period, but I knew during extreme stress, the only way to persevere is to stand your ground and remain resolute in your goals. I am eternally grateful to my team and co-founder, who supported me throughout that trying time.”
Although the challenges were significant, the company’s existing investors continued to provide financial support, and the loyalty of many customers helped make the problematic phase somewhat more manageable.
Avlesh emphasized the importance of shedding old preconceived notions and taking charge of one’s own narrative, stating, “Don’t leave your story to be told by others.” To manage the situation, Avlesh and his team took a proactive approach. They communicated openly and honestly with stakeholders about what had happened, how the company was responding, and why there was no cause for alarm. Through its transparent communication, WebEngage built trust with stakeholders and navigated the challenges of the pivot.
The New Avatar of WebEngage 🌱
In July 2016, the team successfully launched a powerful Retention OS (Operating System) after 18 months of hard work and multiple learning phases. The Retention OS integrates essential features into one seamless full-stack solution, including a customer data platform, personalized engine, omnichannel campaign manager, customer journey orchestration engine, and analytics engine.
The pivot proved successful, and many existing customers of WebEngage quickly moved to the new solution, which has a higher ACV of $25,000. This provided market validation and attracted new investors, including India Quotient. At that time there were two bigger competitors in the market but Anand at IndiaQuotient took the bet, nonetheless. His view was “We have always believed that the best teams build the best product, and in the long run, it’s the best product that wins. WebEngage also demonstrates our belief that companies that succeed in SaaS in India can go global and repeat their performance. We will continue to back them as far as we can.”
WebEngage has been a reliable partner to mid-market customers, particularly in the emerging industries of fintech, edtech, and e-commerce. Nonetheless, the company has recently been expanding its reach into larger enterprises. The COVID-19 pandemic accelerated this growth in the enterprise category, and WebEngage has successfully onboarded significant players such as Unilever and Adani Group. Despite fierce competition, WebEngage has achieved an impressive $25 million in annual recurring revenue (ARR) and is growing at 100% YoY while maintaining profitability.
Today, WebEngage serves a global base of over 800 customers, with approximately 60% of them located in India and the rest distributed across emerging markets, including Latin America, Southeast Asia, and Europe. Avlesh proudly claims “Our customers generate 20 to 25% of their revenue from using WebEngage.”
He further asserts, “Our new business positioning has given them greater confidence. Despite raising less capital than their competitors, we are growing faster than them. This achievement directly results from our team’s hard work and perseverance throughout the pivot process.” With a growing customer base, the company is excited to tackle new challenges and provide solutions to their customers’ evolving needs.
WebEngage’s success in overcoming obstacles and establishing itself as a strong player in a crowded market is a testament to the team’s unwavering commitment to excellence and a shining example of the power of determination and grit. As the company continues to forge ahead in this exciting new chapter, we wish the team all the best and look forward to their continued success in their future endeavours.
WebEngage’s story is the last in IndiaQuotient’s latest series on entrepreneurial pivots, where we aim to uncover inspiring tales of entrepreneurs who have successfully pivoted their businesses towards success. If you haven’t already, check out the first, second & third stories in the series which talk about the incredible journeys of PagarBook’s, Oakter’s, and Sugar Cosmetics’ founders.
📢 Also, stay tuned for something very exciting(and heavily requested)coming up — a story series on “A Startup’s Journey of Finding PMF”!
