Customer acquisition, lifetime value, and customer attrition (churn) are some of the main metrics that need to be managed closely for any growing business. Churn is one of the critical metrics that closely impacts the others from lifetime value, growth rate, virality, and CAC payback. In fact, 80% of a company’s revenue comes from existing customers. A small increase in retention can have an oversized impact on profitability. Involve.ai is a customer intelligence platform that leverages a company’s existing data points to build detailed profiles to determine which customers are most likely to churn, allowing teams to triage the relationship before it’s too late. Customer success teams are often manually going through disparate records across internal and external tools to do this work, neglecting revenue enhancement opportunities; Involve’s platform automates this laborious process with AI with a reported 94% accuracy in predicting churn. The business is born from an internal tool built at the founding team’s previous startup; the team recognized that this tool had widespread adaptability as a stand-alone product.
LA TechWatch caught up with Involve.ai CEO Gaurav Bhattacharya to learn more about the Aha moment, the company’s strategic plans, recent round of funding, which brings the total funding raised to $18.5M, and much, much more…
Who were your investors and how much did you raise?
We’ve raised $16M in a Series A financing round led by Cathy Gao at Sapphire Ventures, with participation from existing investors like Bonfire Ventures, Greycroft, Launch Capital, BDMI, and new investors like GTM Fund, Fenwick, Gokul Rajaram, Stanford University, and Michael Whitmire.
Tell us about your product or service.
involve.ai’s platform uses artificial intelligence to help businesses prevent customer churn and accelerate revenue growth, unlocking predictive customer intelligence from existing data. We trained our AI algorithms on over 120 million data points, focusing on dispersed qualitative data (email, call notes, chat records, and more), which makes up the lion’s share of a company’s records.
As a result, our early warning dashboard has an average accuracy of 93 percent in predicting churn for customers while continuously improving and automating industry best practices.
We launched an employee volunteering and engagement platform in 2016. Users grew, and so did customers. We had nearly 440,000 users on the platform. However, churn became an issue for us. We were losing customers at 20% MoM and wanted to figure out why this was happening and how we could stop it. To solve the issue, we built a simple version of a customer intelligence platform internally.
It was designed to unify key indicators for customer experience from product usage, support, and communication signals from our Salesforce, Snowflake, product backend, Zendesk, JIRA, Gmail, and Zoom platforms. These signals would then go through our python algorithms to predict top churn risks, revenue expansion opportunities, and tasks to improve the overall customer experience.
Our product didn’t just work; it worked well.
In fact, it’s a huge reason we were able to get through COVID. With COVID, the value of each customer became more critical than ever. So, we gave our internal platform to 4 companies to try, and they couldn’t stop raving about it. One company reduced churn by 16% and added $400K expansion revenue in just two months.
That was our “aha!” moment.
How is it different?
- The only AI platform for customer success
- The first early warning dashboard with actionable insights
- The only platform where no engineering time is required from the customer
What’s your business model?
How has the business been impacted by COVID-19?
Customer Success emerged as a top priority for most companies during COVID-19. Business processes were completely disrupted, causing many customers to rethink their approach to how they operated. We saw some industries take off, others shrink, and others remake themselves entirely. Through all this, having a good pulse on customer health, behaviors, preferences, and goals was essential to success.
Every customer matters post-COVID, so companies are finding ways to prevent churn, increase expansion and give an excellent customer experience to every customer, which increases the value of our platform.
What market you are targeting and how big is it?
All B2B and B2C subscription businesses face customer churn and expansion challenges. There are about 24,000 B2B SaaS businesses in the US and our avg contract value at $100K, we have a $2.4B market opportunity. With a bottoms-up approach worldwide B2B and B2C subscription and the subscription business model growing at 10% CAGR, there is a $44B market opportunity for a customer intelligence platform.
What was the funding process like?
What are the biggest challenges that you faced while raising capital?
A lot of the challenges were internal.
- As an immigrant founder, the biggest challenge was imposter syndrome.
- For our last company, I was rejected by 144 VCs for Series A, which was very hard to overcome.
- Even though the company was doing excellent, every pitch I would be nervous about the small things not going so well.
- Got a few very quick rejections. Ultimately what got VCs excited was amazing customer references. Employees and leaders at companies couldn’t stop raving about our customer intelligence platform and that made them invest.
What are the milestones you plan to achieve in the next six months?
- 5x our revenue growth.
- Releasing major product features.
- 2x our company size.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
- Set clear goals (short-term vs long-term).
- Measure performance weekly, monthly, quarterly (Objectives and Key Results).
- Learn to do more with less. And run as if you are capital constrained. That will let you make meaningful decisions.
- Switch to remote work to save money.
Where do you see the company going now over the near term?
involve.ai will be the most highly trained, accurate, and automated customer intelligence platform on the market. We’ll win the market using the quality of our algorithms on the backend, and the simplicity and ease of our tools on the front end.
What is your favorite restaurant in LA?
Tandoor India on Pico. It’s not highly rated on Yelp but it’s authentic Indian food!