Having a thriving community is the backbone for creators, but when the global pandemic hit, brands also found that they needed similar engagement with customers that were now interacting with their products online.
Circle is working to make those engagements effortless by building a community platform so that creators and brands can bring their discussions, members and content together in one place, kind of like a “Shopify for creator and brand-led communities,” Sid Yadav, co-founder and CEO told TechCrunch.
The company was founded in January 2020 to make engaging with paying customers and thus building creator businesses as effortless as possible. We profiled the NYC-based startup last year when it announced its $1.5 million seed round in August 2020, and then again in February 2021 when it raised another $4 million.
Circle now has over 4,000 paying communities, paying subscriptions averaging $40 to $400 per month, that in total have 2 million members, Yadav said.
Investors continue to see the value and injected $24.7 million in Series A funding, Circle announced today. The round was led by Tiger Global, with participation from Box Group, Notation Capital and a group of individual investors including, Brendon Burchard, Adobe’s Scott Belsky, Codecademy CEO Zach Sims, Front CEO Mathilde Collin, Teachable CEO Ankur Nagpal and Menlo Security’s David Eckstein.
In addition to the investment, Burchard joins as an advisor to the company. Circle powers his GrowthDay community for over 300,000 members, Yadav said.
The latest investment gives Circle $200 million in post-money valuation. This is a jump from a $40 million valuation from the February seed round. Over the last few months, Yadav said the company got signals that product market fit was there, which put levers in motion for Circle to move faster as the community space began getting competitive.
“For us, this is nice to have,” he added. “We want to make sure we earn the valuation and believe that we can return it for investors. One of the goals was to see how best to utilize the money to leapfrog the competition.”
Yadav wasn’t intending to raise additional capital so soon after its last round; in fact, the company thought it would be able to ride it out for a couple of years and go after capital again in early 2022.
However, after reaching 25% in month over month revenue growth in September and receiving inbound interest, especially from Tiger Global, the company thought it would be best to raise sooner and get the right valuation.
The attention from Tiger “was very flattering,” Yadav said. He was interested in their founder-first approach in investing and that the firm was going to connect Circle with its network of management consulting and recruiting.
Along with that recent growth, Circle just crossed over $4 million in annual recurring revenue, up from $1 million a year ago. It also now has 40 employees, growing from 15 at the beginning of the year.
It also launched several new features in 2021, including discussions, livestreaming, events capabilities and payments — features customers had been requesting.
“We were able to speak to a big chunk of early customers about what they were needing from the community platform,” Yadav said. “Some of our competitors were around for a long time, but what no one was getting right is an all-in-one approach combining chat, social media and community.”
The new funding will enable the company to further invest in R&D, technology development, building both Android and desktop apps, investing in sales and customer success teams and creating a marketing team. Circle recently brought on a head of sales, so the company will be focused on ramping up that area as demand from brands and businesses comes in.