Less than a year after raising a crowdequity round, Portland software maker Customer.io is back with another funding round, this time featuring venture investors.
In a blog post Tuesday, Customer.io founder and CEO Colin Nederkoorn outlined the new round that was led by Spectrum Equity and included existing investor Oregon Venture Fund. As a result of the deal Spectrum Managing Director Pete Jensen is joining the company board.
The company isn't releasing the amount of the round, said Nederkoorn. According to regulatory filings OVF created a roughly $1.9 million vehicle called OVF Customer.io LLC, which is likely for its participation for this round.
Customer.io makes software for small to mid-sized startups that have high-growth ambitions. Its customer engagement products help companies automate customer interactions across email, push notifications, text message and other messaging applications.
Last summer the company raised $5 million in crowdequity from 2,473 individual investors on the Republic platform. That is the most that can be raised through that type of fundraising. At the time, Nederkoorn said he opted for crowdequity as a way to allow customers and other supporters a way to be more involved in the company.
Nederkoorn did note that the valuation on this round is higher than the $400 million valuation from the crowdfunding last summer. Investors from the crowdfunding, who held what are called Crowd SAFE investment contracts, were converted to shareholders on this round, he added.
The current round will be used to help the company scale Nederkoorn wrote. This means hiring for engineering as the company builds out more of what it sees as a customer engagement platform and for marketing. In his blog post, Nederkoorn noted he would like to shed the reputation as “the best kept secret in marketing tech.”
The company, which has always been remote-first, has 165 employees and plans to be more than 250 people by the end of the year.
Customer.io has been around for 10 years and Nederkoorn has emphasized organic growth and bootstrapping over taking lots of investor funding up front. He calls this philosophy “fundstrapping.” By doing this, he argues that Customer.io has been able to better find product market fit, build what customers want and “figure out scalable repeatable growth.”
The company ended 2021 profitable and with annual recurring revenue of $29.9 million, up 78% year-over-year, Nederkoorn wrote. Prior to its crowdfunding last year, the company had raised $4 million from investors.
“Colin and team have consistently taken the long-term approach to company building by being focused on product and customer experience over the last 10 years. During that time they also have built a very successful hybrid self-serve and sales-assisted model, which allows frictionless onboarding and an ability to seamlessly grow along with their customers,” said Jensen in a written statement.
