Portland software company Customer.io is raising a crowd equity round to allow customers and other company supporters to be owners in the fast-growing company.
The company quietly opened the round Tuesday on the online platform Republic, the team wanted to give current customers and other supporters first crack at the round. And within about three hours had raised about $300,000. The round was pushed publicly this morning.
Founder and CEO Colin Nederkoorn said the company, which is growing about 75% year-over-year so far in 2021, doesn’t need the capital. Instead, this move is part of his bigger plans.
“We want to be a big and impactful company,” he said. “That might mean at some point going public, but when I look at who cares about our company (now) it’s customers and people who wish to be customers. There was no way for them to be owners until we got to a public point.”
However, recent changes in the rules surrounding equity crowdfunding that increased the total amount that can be raised made this option more attractive. Companies can now raise up to $5 million. Nederkoorn doesn’t know if Customer.io will hit the cap, but he would be pleased if they did.
The company is using the Republic platform to raise this money. It is the same platform used by Bend-based Lora DiCarlo, which raised more than $800,000.
Customer.io makes software aimed at small to mid-sized startups that have high-growth ambitions. Its product is in the customer engagement category and helps companies automate customer interactions across email, push notifications, text message and other messaging applications.
The company has 100 employees and more than 2,600 customers. It has been profitable since April of last year.
The primary driver for this round is to allow more people ownership of the company. But, Nederkoorn said that funds will allow for faster product development and adding customer requested functions.
Customer.io has raised $4 million total from previous investors. Nederkoorn has taken a conservative approach to funding and building his business. He calls it “fundstrapping," a hybrid of raising traditional venture capital and bootstrapping. The company has raised money from investors but it is focused on revenue and running the business at a break even pace.
“It’s a more efficient way to grow the business. Not to create profit but to invest every dollar back,” he said. “We have been doing that since we raised (the last round) in 2017.”
The company had consistently seen 30% year-over-year growth for the last several years but last year hit an inflection point and growth has reaccelerated to a 75% year-over-year rate. It has $20 million in annual recurring revenue.
“We have always been a little bit unconventional in the way we think about raising money,” he said.
Nederkoorn is hiring and expects the company will be 150 people by the end of the year. Customer.io has always been a remote-first company. It had a small office in downtown, but Nederkoorn is letting that lease go this fall and downsizing even more. He plans to rent a smaller space at a coworking site in Slabtown.
The company has a cluster of employees in Portland but has staff across the country and in 21 countries.
