After gaining more than 2,000 customers — including retail giant Sears — Techstars alum Codeship is ready to hit accelerate again and chase after more, even larger customers that need better, faster ways to seamlessly test and roll out app updates.
The startup announced on Tuesday that it has raised a $7M Series A round led by Ascent Venture Partners, with participation from existing investors Sigma Prime Partners, Boston Seed Capital and F-Prime Capital. That brings its funding total to $11.1 million, and Ascent General Partner Luke Burns will be joining the startup's board as a result.
Moritz Plassnig, CEO and co-founder of Codeship, told BostInno that the startup only started its sales operation earlier this year and that all of its customers so far have been obtained through inbound marketing, including blog posts and ebooks. More specifically, he said, support for Codeship has grown fast because developers genuinely like the product and that kind of enthusiasm can help entire companies get on board and encourage other developers to adopt it through word of mouth.
That enthusiasm also got investors like Ascent to sign on for the Series A round.
"What they clearly heard is our customers are not just forced to use it. They really like us and they recommend us and they talk to other companies and developers about us and I think that’s a very unique position to be in," Plassnig said.
"What they clearly heard is our customers are not just forced to use it. They really like us."
Burns, general partner at Ascent and Codeship's newest board member, agreed.
"During our diligence, we were struck by the frequent praise that customers lavished on Codeship’s ease of use, speed, flexibility and unparalleled customer support," he said in a statement.
Codeship plans to use the funds to go after more large customers like Sears, which take more work to get on board than the many startups and smaller companies that make up most of its customers right now. With plans to hire people in sales, marketing, support and engineering, Plassnig said, the startup hopes to find better ways to feed off the enthusiasm of developers, who can be important to the process of getting larger enterprises to sign up.
"It’s the developer who brings the product into a company, which is very powerful so to continue, you have to do a very complicated enterprise sales process," Plassnig said. "We will focus in communicating the value so that large clients are adopting Codeship faster than in the past."
If Codeship manages to get more large customers over time, the rewards can be immense. Plassnig said teams of over 100 developers could bring annual revenue from one customer alone in the six figures.
Beyond building bigger operations for sales, marketing and support, what Plassnig said will help Codeship get these kinds of customers is providing a product that a single developer can start using, for free if they wish, and that allows them to seamlessly use it without a manager's approval. "It's only possible when it’s frictionless," he said.
Codeship currently employs nearly 30 people, with most of them working in WeWork South Station in Boston, and the startup's hiring plans will bring that number to around 40 or 45 by the end of the year, Plassnig said.
