With $4.6M In New Funding, Preact Helps Software Companies Keep Customers Happy

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Startup Preact is officially launching today with a product that it says can help companies increase customer spending and reduce churn. It’s also announcing that it has raised a $4.6 million Series A led by Trinity Ventures.

CEO Michael Geller said the Preact system looks at a variety of signals and uses data science to help subscription software companies identify when their customers are likely to either leave the service or upgrade — in other words, the areas where the business should probably focus its customer-service efforts. Preact also integrates its data into products like Gmail, Marketo, Salesforce, Zendesk and Desk.com.

As a simple illustration of how this kind of system is useful, Geller said he stopped going to his gym back in June of last year, but he didn’t start getting any “hey, come back!”-type emails until he actually quit in October. At that point, it was too late — Geller argued that his lack of attendance was an obvious, important signal that his gym missed.

Trinity general partner Karan Mehandru (who has joined the Preact board) said Preact “fundamentally questions” the assumption that businesses actually know what’s going on with their customers.

Both Mehandru and Geller contrasted the more common and straightforward “rule-based” approach with Preact’s “science-based” strategy. Mehandru suggested that simple rules about when to flag potentially unhappy customers fall short, what happy customer looks like will differ from department to department and from account level to account level. That’s why you need a system that’s more flexible and can adapt based on the data.

Although the official launch is today, Preact says it’s already being used by more than 40 businesses, including Adomic, Bitium, Doctorbase, EatClub, Education.com, Lettuce, Propertybase, and RJMetrics. (Geller said that when some of Preact’s first customers received their initial list, their response was, “There’s no way we’re in trouble with these customers.” Then they called up those customers and found out there were some unstated problems.)

Preact’s previous investors, Atlas Ventures, Karlin Ventures, Bee Partners and Lion Wells Capital, also participated in the new funding.