Candu, a software company specializing in no-code web tools designed for SaaS applications, revealed this morning that it has secured $5 million in a new funding round.

TechCrunch spoke with Candu’s founder, Jonathan Anderson, and Villi Iltchev, a partner at Two Sigma Ventures and the lead investor, to discuss the details of the financing.

It’s worth noting that this funding round was actually completed some time ago, in March. While it’s typical for venture capital announcements to occur after the fact, a delay of almost nine months is unusual. Anderson explained that he preferred to wait until Candu’s product was available to the public before sharing the news, which is a reasonable explanation for the timing.

This $5 million investment isn’t Candu’s first; the company had previously raised approximately $1 million following its participation in Entrepreneur First, a globally-focused accelerator program.

The investment process began as many do, with an investor initiating contact with a promising young company well in advance of any agreement. Iltchev first contacted Candu in September 2019, expressing his enthusiasm for their work to enable significantly more customized onboarding experiences within SaaS applications.

Many users are familiar with the often-generic and frustrating walkthroughs presented when starting a new online service – directions that are frequently skipped. Candu aims to address this issue by providing no-code development tools that empower non-technical personnel to create personalized onboarding pages. This allows SaaS applications to deliver highly tailored onboarding experiences to different user groups.

Why is this important? For SaaS businesses of all sizes, effective onboarding is a crucial strategy for boosting user engagement, a vital measurement for contemporary software companies. This is because engaged users are less prone to cancel their subscriptions and are more likely to increase their spending on the service over time. Therefore, successfully activating users is a significant undertaking.

Companies like WalkMe and Pendo have already achieved substantial success by tackling this problem from a different perspective. WalkMe recently raised $90 million in December, and Pendo secured $100 million in October.

Although Candu’s concept was compelling and the market opportunity clear, it took several months after the initial meeting between the investor and the startup for the deal to finalize. Iltchev requested Candu keep him updated, and Anderson contacted him later in 2019 to inform him that other investors were also showing interest, ultimately leading to the announcement made today.

Superpowers

Startups utilizing a no-code approach possess the ability to significantly strengthen the position of employees within organizations who frequently compete for engineering support. Increased capacity for various teams to independently construct and launch products translates to enhanced agility and productivity. This also reduces reliance on requesting assistance from the engineering department.

Consequently, no-code startups – and similar no-code and low-code initiatives – are particularly noteworthy. As an example, if Candu achieves widespread use, marketing and customer success departments could potentially design and refine onboarding processes without requiring support from other divisions. This would not only conserve valuable time but could also yield improved outcomes through a greater number of revisions.

Candu is still in the process of defining its core offerings, however. The company’s co-founder, Anderson, shared with TechCrunch that they are currently focused on establishing a strong product-market fit. This is a common stage for a startup that is actively progressing through initial seed funding rounds.

When questioned about anticipated average annual contract values (ACV), Anderson indicated that market dynamics will ultimately determine pricing, as the service was only recently launched in late October. Currently, Candu advertises pricing plans beginning at approximately $200 per month, providing insight into their target customer base.

Ultimately, the startup’s success hinges on expanding its customer base and leveraging those initial clients to generate both income and valuable insights, which can then be reinvested into its operations and product development. It will be interesting to observe the progress made with the seed funding secured in March.