Customer retention software firm ChurnZero Inc. has raised $25 million in fresh funding, the D.C. company announced Thursday.
The funding round, led by growth equity firm JMI Equity, brings the company’s lifetime funding to $35 million. Grotech Venture and Baird Capital also participated in the new round, according to the announcement. ChurnZero, founded in 2015, most recently raised $7 million in April 2019.
The money will go toward expanding the team, accelerating and deepening product development and helping fuel the company’s marketing, ChurnZero said in the announcement. The firm's platform helps reduce customer loss and boost retention for its client companies (i.e. churn) by engaging customers and identifying those that are using clients' products less or not at all, allowing a company to work proactively to keep them as customers.
“The last 12 months have brought extraordinary challenges for all of us, but we have seen firsthand from our customers the inextricable link between customer success and the resilience of subscription businesses,” said You Mon Tsang, co-founder and CEO of ChurnZero. “We expect customer success to gain even more strength as a department as a result of this increased attention on the customer and revenue retention, and we are steadfast in providing our customers with a strong return on investment.”
The company had 65 employees at the beginning of 2021 and has since grown to 80. It plans on having 125 employees by the end of the year.
The investment comes as customer success platforms — a catch-all term for a variety of tech that helps manage companies' client lists and retain their customers — as an industry continues to grow, with a projected market of $2.6 billion by 2024, according to MarketsandMarkets. So-called customer success roles were ranked sixth in emerging jobs in a 2020 report by LinkedIn.
You Mon Tsang was a recipient of a Washington Business Journal Minority Business Leader Award in March 2019.
Tsang has grown — and then sold — several tech companies over the years. In 1995, Tsang founded early internet startup Milktruck and sold it just one year later. In 2000, Tsang founded social media monitoring service Biz360 — and sold it in 2010. Tsang sold another company, Engine140, to communications company Vocus, also in 2010. In between founding companies, he has worked at other firms including Oracle Inc. and Xerox Inc.
