When it comes to measuring SaaS success, companies look at a number of key metrics, including annual recurring revenue (ARR) and net revenue retention (NRR). The latter measures the amount of recurring revenue from existing customers. If it goes up, it means that customers are expanding their usage of the product, making it a key measurement for companies selling software as a service.
Reef.ai, an early-stage startup, recognized that there were few tools out there that helped automate the collection of data around NRR, and they have built a platform from the ground up to help. Today, the company announced a $5.2 million investment.
“Our whole vision is to create a platform really for plug and play net retention excellence for early-stage to mid-stage startups all the way to mature organizations who have a huge opportunity to more predictably drive revenue out of their existing customer base,” company co-founder and CEO Brenton Grimes told TechCrunch.
The system can connect to each system in the organization that touches the customer like Salesforce and HubSpot for customer data, systems that collect revenue data from the customer, or any other relevant software, going so far as to build a data warehouse to store this information for the customer.
“We’re really good at connecting to, digging and analyzing revenue data and patterns. And then on the other hand, we’re pulling in engagement data. So think product telemetry, think marketing and engagement data, think support engagement data, etc. And then what we’re doing is we’re able to actually pull these elements of data together. And then for each of our customers, we actually build a data warehouse,” Grimes explained.
His background was working at MuleSoft as global head of customer success when he began looking at ways to track the revenue data from existing customers. He set up an internal system that they could run occasionally, but it got him thinking about a product that would provide an accurate measure of NRR whenever you need it.
He launched Reef.ai in 2021 to build such a solution, and he believes this is a highly underserved area and can push the customer success department with quality data about how to get current customers to expand their usage.
“We call ourselves a net retention engine, and there’s nothing out there that really focuses on that as a specific goal,” he said.
The company already has over 30 customers, some with six-figure contracts, and he expects to surpass $1 million in ARR this year. The company currently has 10 employees and as former executive sponsor for the diversity council at MuleSoft, he has made diversity a core value for his new company.
“I think that we’ve embraced that from the beginning just as a cultural value and something that we’re very intentional about, and I want to create an organization where I’m excited to get up and go to work every day and everybody is really safe and inspired to do their best work,” he said.
Today’s $5.2 million round was led by Struck Capital with participation from SCV-SBI, a joint fund between Startup Capital Ventures and SBI Holdings; Builders VC; Dig Ventures, a fund led by MuleSoft founder Ross Mason; and several industry angels.