Why we backed airfocus — helping businesses prioritise the right strategic options
As our latest investment in Germany, Nauta Capital recently led the €1.7m Seed round in Hamburg-based airfocus, a product management and roadmapping software (see our PR here).
airfocus joins our existing German portfolio Talentry and Zenloop (and over 50 other European B2B start-ups in our portfolio) roughly one year after the start of our investment office in Germany (btw. happy birthday to us!).
In this post, we wanted to share some high-level insights on why we decided to invest in airfocus. We hope it might also prove helpful to entrepreneurs regarding early success indicators we look for in early-stage B2B SaaS startups.
Market & background — seamless integration into existing workflows
airfocus offers a SaaS product management and roadmapping solution to evaluate, define and visualise business strategies. For full stickiness, the solution integrates seamlessly with all major everyday task management platforms such as Trello, Jira and Asana operating as an additional intelligence layer on top.
Unsatisfactory strategy prioritisation has a detrimental, direct effect on the overall company efficiency and in-team communication. Both lead to direct high monetary costs for companies. Gartner predicts that by 2023, 75% of all project and product managers will rely on high-level roadmapping and product management software.
Global product-led growth — mastering low touch sales
Despite the young age of the company, the team already counts more than 300 customers from over 50 different countries across multiple continents, achieved through an extremely efficient product-centric growth approach. Teams from Washington Post, Decathlon, and Nike, already use airfocus.
Each month, the MRR base grows by a stellar double-digit growth rate hinting at early indicators of exponential growth. Let’s not forget the relatively small team size (4 FTEs, incl. 3 founders, and no dedicated sales employee besides the founding team), airfocus is a prime example of no / low-touch bottom-up sales; which convinced us about their high capital efficiency.
Expansion & Viral Loops — thriving with existing customers
To establish common ground, we define net negative churn as follows:
Expansion MRR from existing clients > MRR churn and MRR down-sell
Net negative churn is the “holy grail” for reaching sustained growth at high rates in SaaS. Due to its compounding nature, the new MRR from expansions grows in line with the size of the customer base thereby producing high growth rates with only limited capital needs.
Although it is still too early to tell, we believe airfocus has the potential to reach constant net-negative churn through the collaborative nature of the platform that naturally invites new users within the customer’s teams to participate in the prioritization and roadmapping processes.
airfocus currently has three major levers to MRR expansion: collaborative nature of the product (=network effects), the seat-based tiered pricing and early signs of viral loops through roadmap sharing and product voting features.
Needless to say, we love companies with high net euro retention and viral loops.
In a nutshell, airfocus impressed us with a truly global product-led growth, expansion metrics, and extraordinary capital efficiency.
We are extremely excited to back Malte Scholz, Valentin, and Christan on their growth journey — Welcome to the Nauta family!
Like what you read? Check out airfocus’ open positions here.
Please note: Especially regarding the company’s specific KPIs and future strategy I decided not to go into much detail here to keep competitive information private. This is obviously just an extract of our investment thesis.
