Andreessen Horowitz Backs Vitally's $9M Funding Round

Vitally Secures $9 Million in Series A Funding

Vitally, a customer success platform, has successfully closed a $9 million Series A funding round led by Andreessen Horowitz. This investment will be used to further develop the company’s SaaS platform, which focuses on automating customer experiences.

The Genesis of Vitally

The concept for Vitally originated with co-founder and CEO, Jamie Davidson, during his tenure at Pathgather. While serving as chief customer officer, Davidson identified a significant gap in the market for tools capable of automating routine tasks.

He found existing solutions inadequate and subsequently embarked on creating a more effective platform.

The Shift in Customer Engagement

The global pandemic dramatically highlighted the importance of customer satisfaction. Brands were compelled to adapt their customer engagement strategies as online purchasing became increasingly prevalent.

Davidson explained to TechCrunch that customer success representatives are now managing significantly larger customer portfolios – often thousands – due to the rise of product-led growth, a shift from the traditional model of managing a dozen accounts.

Vitally’s Platform Capabilities

Founded in 2017 and based in New York, Vitally consolidates all customer data into a unified system.

This data is then processed by an engine that delivers valuable engagement insights, identifying customer needs, potential churn risks, and opportunities for revenue expansion.

The software also incorporates automation features to optimize workflow and guide customer success teams towards the most impactful tasks, ensuring timely and relevant engagement.

Andreessen Horowitz’s Investment

Andreessen Horowitz proactively approached Davidson regarding the Series A funding. Davidson was drawn to the firm’s aligned vision for customer success.

This new funding brings Vitally’s total raised capital to $10.6 million, including a previous $1.2 million secured in September 2019.

Strategic Growth and Funding Decisions

From its inception, Vitally has demonstrated robust revenue growth, allowing the company to prioritize platform development and postpone active fundraising efforts.

“While a Series A was always part of our long-term plan, we weren’t actively seeking funding,” Davidson stated. “However, the strong synergy and support offered by Andreessen presented a compelling opportunity for accelerated growth.”

He emphasized the lag in technological advancements within the customer success sector and the potential for Andreessen Horowitz to facilitate scaling and support customers managing large client bases.

Future Plans and Expansion

Davidson plans to allocate the new funding towards expanding Vitally’s team across all departments and bolstering marketing initiatives to increase brand awareness.

The company anticipates growing to a team of 30 by year-end to support its consistent annual revenue growth, averaging a 3x increase, and customer acquisition efforts.

Vitally currently serves prominent clients including Segment, Productboard, and Calendly.

Andreessen Horowitz’s Perspective

As part of the investment, David Ulevitch, a general partner at Andreessen Horowitz, will join the Vitally board.

He recognized a significant opportunity to redefine how SaaS companies deliver customer success.

Ulevitch shared that, like Davidson, he observed that customer success teams are now critical to the success of SaaS businesses, but existing technology had not kept pace with evolving market demands, particularly with the increasing adoption of self-service and product-led approaches.

Positive Market Feedback

Prior to investing, Andreessen Horowitz received “rave reviews” from Vitally’s existing customers.

Ulevitch noted the overwhelmingly positive feedback confirmed that Vitally offered the most effective solution available, accurately reflecting how businesses operate and interact with their customers, especially those with a large number of paying users.

“Securing the initial revenue is important, but customer retention and expansion are what truly differentiate successful companies,” Ulevitch added. “Vitally is uniquely positioned to help companies achieve these goals, expand their accounts, and ultimately dominate the market.”