ChurnZero, a startup with a platform that aims to help subscription-based companies keep customers, raised $2.5 million in new funding, according to cofounder You Mon Tsang.
Grotech Ventures led the round, with participation from Middleland Capital. Existing investors at the Center for Innovative Technology (CIT) and Charlottesville Angel Network were also in on the round.
The Arlington, Va.–based company was founded in 2015 by Tsang, a four-time founder, and CTO Mark Heys. Both have experience starting and building Software as a Service (Saas) products, and saw the impact of churn, or subscription cancellations. An entire category known as customer success is designed to help companies retain customers.
ChurnZero’s customers are in the B2B space. Venture capitalists also deal with the issues they address.
“We invested in ChurnZero because we think they have a great team executing well in a nascent but growing market. But we also personally see the scourge of churn in our portfolio companies; we talk about retention and Customer Success in every single board meeting we attend,” Steve Fredrick, a Grotech Ventures General Partner who is joining ChurnZero’s board, said in a statement. “We think ChurnZero has created the answer to better retention.”
ChurnZero’s platform is designed to provide data on customers that shows how the product is being used, and can indicate whether a customer will renew. It also has tools that will help encourage customers to stay with the product.
“Our goal is to [become] D.C.’s next great SaaS company and one of the leading suppliers in the customer success sector,” Tsang said.
Tsang said the funding will help in all parts of the organization, including tech, product and sales and marketing. It will also mean hiring to add to the current team of 15 people. Currently, five postings are open and more are expected later this year.-30-