Our new investment — Tidio — behind the scenes
We are very happy that our investment of 1MM USD into Tidio is finally announced!
If you also want to join their journey to unicorn check out Tidio’s job openings
We are often asked by other investors what was our thesis and reasoning behind supporting yet another live chat solution. On the other side, startups ask us what they should have to get us interested. Addressing both, I believe this summary will be a good answer:
- Founder & team
We met Tytus a year before our investment. During the year he has shown a couple of things that, in our opinion, are crucial for the founder of a company that is supposed to grow rapidly:
- very fast learning curve while always staying open for feedback
- ability to focus on what is key for the company at a given moment
- ability to convince great people to join the company
- curiosity for the latest best practices in areas of growth and product development
When we visited Tidio in person it turned out the company is full of exceptional individuals who are on top of industry best practices not only on a theoretical level but really implementing them. What’s even more amazing, many of them learned these things on the go, growing alongside the company. Also, understanding of core KPIs and what will really drive the growth of the business among the team was way above our expectations.
2. Traction
- During our process of getting to know the company (which was unusually long) Tidio has more than doubled its client base with growing ARPU and declining churn at the same time
- When we started talking to them, they were 10th live chat software globally when it comes to the number of websites using the software. In 11 months they managed to get to #5 position (today it’s actually #4).
3.Product
- They have a great product — the reviews are outstanding and the ease of use is exceptional — we (no IT people) were able to set up a chatbot in minutes!
- Tidio is very customer-oriented — the process of customer support is top and customer feedback is very quickly included in product changes
- Data-driven approach to product development is in line with absolute best practices
4. Opportunity
On our first meeting, we thought: ”Such an exceptional founder running a business in such an unattractive market (crowded, interesting 10 years ago, no clear differentiation).” Yet when you dig deeper it turns out there aren’t many high quality solutions for the smallest clients, usually micro-e-commerces, and this group of clients represents an extremely big and growing potential market (sufficient to build a unicorn company). While a big part of the market is addressed by free solutions, Tidio also attracts a majority of its customers with their free product, but later on convinces them to pay for premium features, such as more advanced chat options and powerful, easy to set-up chatbots. Also, penetration of live chat and chatbots is still low (sic!) e.g on Shopify about 1 in 10 shops uses any software allowing them to communicate with their website visitors.
Last but not least the company itself sees great growth potential and has identified 2 new channels for growth, which are developed with top experts in the industry.
5. Captable
It is often mentioned as an issue (or showstopper!) in Poland — here it basically wasn’t — very good Seed VC — bValue; 2 angel investors and founders with majority stake
Tytus, the founder, claims Tidio is going to become a unicorn in 6–7 years. I strongly believe they can do it in 5 — as Inovo Venture Partners we will do our best to help the Tidio team achieve that. Go Tidio!
P.S. Fun Fact — Tidio sent us their pitch deck after we signed the term sheet — so dear founders — traction is really enough — when you have it you just give investors chartmogul/profitwell access and wait for term sheets:)
