We are happy to announce, that a new company joined our #innestfamily! We took part in a $4m Series A, backing an outstanding company that is building a new category of sales enhancement software. A company that is ran by extremely committed founders with a vision and courage to make a global business, operating from our hometown of Krakow. A company that delivered exceptional growth rates proving that you can build an international company while operating locally. Please meet CallPage.
At Innovation Nest we are screening around 3000 European early stage B2B software companies annually. Every company has its own history, tackles different issues, is being run by founders with various backgrounds. There is no perfect way to scale a business from idea to the first $1m ARR. But one could distinguish a specific path of growth which is somehow reasonable and you cannot neglect its relevance.
It goes something like this:
It is not a rocket science and you can find a similar slides in the literature and various blog posts. But yet it is not so popular.
CallPage is in the middle of the road having raised Series A, but previously crawled through every single point of this path. It is not so common to see the companies taking advantage of the knowledge and experience they could get in the right incubator, accelerator and from the right angel investor. And from our experience it really helps.
It was 2,5 years ago — in December 2015 — when CallPage Founders came to Innovation Nest for the first time. They had around 20 customers and were building a completely new solution that we couldn’t qualify to any existing software category. They raised some money from AIP Seed Capital and were taking part in Startup Wise Guys accelerator which gave them credibility, but it was too early for us to make a decision. We lacked a market confirmation of product-market fit and some initial traction even though a team was very good and kept us updated in terms of metrics and next milestones. It was Maciek Balsewicz from bValue VC who believed in the product and the Team and backed them with a Seed Round together with Solter Capital.
So what did we invest in? CallPage is developing an automated callback software that engages website visitors and facilitates an immediate conversation in 28 seconds. Being a lean widget CallPage was gathering millions of conversations, preparing a fertile soil to build a conversational AI algorithms. Nowadays both support and sales agents are answering the same questions over and over again. Gathering enormous datasets of different telephone conversations and creating a couple of industry-specific use-cases allows to make a bunch of products on top of that. Marketing hints on what to say next during a call (aka sales scripts) or support/sales voice bots are the directions we believe the industry is aiming.
The way CallPage managed their product is a good example of how the SaaS company should do that.
- They started with a simple widget — a tool to automate a callback — you could leave your number and a company representative called you back
- Then they introduced the dashboard with actionable analytics and CRM/marketing automation software integrations to process the leads
- Right now you can also move your entire phone traffic into CallPage platform, having it measured and analyzed
- In the roadmap you can find the features I mentioned before — AI fuelled marketing hints and support/sales bots
This pattern is interesting because CallPage didn’t start from AI (in opposition to the trend you can see now). They started with a lean product which generated data. Then they locked-up their customers with a phone traffic management and right now they are building AI driven products on top of that.
At Innovation Nest we are long on Artificial Intelligence. We have backed a couple of companies that are leveraging AI (Growbots, Climber Hotel, Elmodis, Infermedica) and we strongly believe that conversational AI is a future of a business communication with a customer.
So the opportunity is enormous. We believe that the telephony is very important sales channel, especially when we are talking about complex products with various variants and a big ARPU. Have you ever bought a mattress online? All those dilemmas whether you should choose spring vs foam filling, how hard should it be taking into consideration your weight, what should be the perfect bed frame etc… There is nothing like an in-depth conversation with an expert. Same with cars, vacations, real estate and power saws.
While e-commerce is growing as crazy, more and more sophisticated stuff is being sold online and more consultancy will be needed. Even today according to a survey conducted by Forrester almost 80% of customers prefer phone conversation as a favourite way of interaction with customer service centers, 33% chose e-mail, 19% web self-service and only 12% picked web chat.
TAM for CallPage is basically every e-commerce with more than 5000 monthly visits and preferably with a complex and expensive product. As CallPage is creating the new category itself (CP has more than 55% of the callback market share according to Similarweb), we decided to benchmark them with other sales enablement or sales enhancement software companies.
Finally the most important part about the Company — the Founders. Ross, Sergey and Andrew are one of the most committed and bright Founders we came across. Although being relatively young Founders, they are very conscious about the market, product, customers and other aspects of their business. They built a complex product, scaled it to over $1m in ARR, managed to produce a lot of valuable content on their blog, tracked conversions from the very beginning and talked to the customers a lot to get an actionable feedback. Right now they are crunching numbers to understand every single metric that drives their business and are actively looking for answers what should they change to do better. That drive and awareness is something you like to see when talking with the Entrepreneurs.
We would invest in CallPage whatever the investors setup would be, but we were convinced that this particular Company would attract the best investors in the region. TDJ Pitango and Market One Capital are reputable co-investors with a proven track record and decent value added — it is good do see clever heads around the table. Adding to that a great expertise from current investors — bValue, Solter Capital and Startup Wise Guys — you get a very strong team shooting to the same goal.