Creatio Raises $68M in Latest Low-Code Funding Round

Creatio Secures $68 Million in Growth Equity Funding

Creatio, a software company headquartered in Boston, Massachusetts, has announced the completion of a $68 million funding round this morning. The investment was spearheaded by Volition Capital, a prominent growth-equity firm. This funding represents a minority stake investment in the company.

Bootstrapped Success and Platform Capabilities

The significance of this deal extends beyond its substantial value, as Creatio had previously operated on a bootstrapped basis. Founder and CEO Katherine Kostereva shared this information with TechCrunch during a recent discussion regarding the investment.

According to Kostereva, Creatio’s platform empowers organizations to streamline and automate their business processes through a low-code approach. A key differentiator for Creatio lies in its ability to rapidly facilitate automation for its clients; the speed at which businesses can deploy live applications from a low-code platform is paramount.

Focus on CRM Automation and Core Technology

Creatio specializes in automating workflows within the Customer Relationship Management (CRM) domain, encompassing tasks related to marketing and sales. However, Kostereva emphasized that the company’s core strength resides in its foundational low-code automation platform.

A Competitive Low-Code Landscape

The low-code market is experiencing considerable investment activity across all stages, from seed funding to late-stage ventures. For instance, TechCrunch recently reported on Stacker’s $1.7 million funding round, focused on no-code solutions. Furthermore, earlier this month, coverage was given to OutSystems’ $150 million raise, resulting in a $9.5 billion valuation, also within the low-code sector.

Therefore, the announcement of another significant funding round for a low-code company was not entirely unexpected.

Low-Code vs. No-Code: A Nuanced Perspective

TechCrunch explored Creatio’s perspective on the distinction between low-code and no-code platforms, a frequently debated topic within the industry. Kostereva underscored the importance of “citizen developers” – individuals who can build applications using intuitive drag-and-drop interfaces, even with limited coding expertise.

However, she also noted that current no-code tools are generally limited to simpler applications. Creatio, she explained, is primarily focused on serving the mid-market and enterprise segments, making a complete transition to a no-code model impractical at this time. Her outlook suggests a future where citizen developers will be capable of achieving increasingly complex results without relying on traditional coding.

Empowering Business Organizations

This viewpoint is both reasonable and encouraging. Greater accessibility to development tools, requiring less coding knowledge, can empower business organizations to take control of their processes, reducing their dependence on dedicated development teams.

Strategic Timing for Capital Raise

Historically, Creatio has prioritized achieving financial breakeven, reinvesting profits to fuel growth. This led to questions regarding the rationale behind seeking external funding now, and altering a previously successful strategy.

Kostereva stated that the company was preparing to accelerate its growth trajectory. She aimed to establish “world-class” metrics – including net retention, revenue growth, and net promoter score – before accepting external investment.

Impressive Growth Metrics

The company’s net retention rate reached 122% last year, and its Net Promoter Score (NPS) stands at 34, according to Kostereva. Regarding revenue growth, she indicated that the company has experienced periods of doubling and tripling, and continues to grow at a rate approaching doubling.

Based on her statements, it is estimated that Creatio is currently experiencing high double-digit growth in Annual Recurring Revenue (ARR).

Capital Allocation Strategy

The newly acquired capital will be allocated to several key areas, including investments in sales and marketing to expand brand awareness, strengthening its partner program – a crucial growth driver – and continued research and development efforts. This represents a diversified approach to growth.

A Broad Market Opportunity

TechCrunch has observed the expansive nature of the software market, noting the capacity for numerous startups focused on Objectives and Key Results (OKRs) to thrive and secure funding without necessarily displacing weaker competitors. Given the vast number of business processes ripe for automation, Creatio and other low-code platforms positioned to accelerate this transformation may benefit from similar favorable market dynamics. Investors evidently share this optimistic outlook.