RJ Metrics raises $1.2 million from power users and angels

RJ Metrics, Center City-based makers of business intelligence SaaS products, have raised $1.2 million from a mix of angel investors from all over the nation.

“The only thing between us and even faster growth was more rapidly iterating on our product and getting in front of even more people,” wrote co-founder Robert Moore in an email to press. “Raising money was the key to going after this huge opportunity as aggressively as possible.”

Founded in Camden by Moore and Jake Stein, the company has had steady rise eliciting praise from customers like Fab.com (whose CEO is an investor) while garnering attention for rap videos, speaking engagements and TechCrunch guest posts.

In 2010, Moore who used to work for a venture capital firm told Technically Philly that he opted not to take outside money.

“We made a decision not to raise any capital as [co-founder Jake Stein] and I had worked in venture capital before and we’ve seen the benefits of waiting to raise money.”

However, Moore said that the company decided that now, as the company doubles down on Philadelphia, was the time. The company opted to rely mostly on angel investors, including DuckDuckGo co-founder Gabe Weinberg for its funding.

“I wouldn’t say I’m weary of VCs,” said Moore in an email to Technically Philly. “I just think it’s common for companies to raise too much money prematurely and for the wrong reasons.  Doing this with angels allowed us to raise the right amount on most desirable timeline. And we’ve gained some amazing partners in the process.”

After the jump, see the company’s complete announcement.

We are proud to announce that RJMetrics has closed a $1.2 Million financing round from a syndicate of world-class technology investors.  Our new investors include SoftTech VC, Lerer Ventures, SV Angel, Zelkova Ventures, Red Swan Ventures, Upstage Ventures, Wharton Professor Kartik Hosanagar, DuckDuckGo CEO Gabe Weinberg, and Fab.com CEO Jason Goldberg.  Jason Goldberg has also joined our Board of Directors.

As a fully-bootstrapped and profitable company, the decision to raise capital was not an obvious one.  Jake and I both worked as VCs prior to founding RJMetrics, and that experience taught us the benefits of waiting as long as possible to raise capital.  We agreed from day-one that we would only take on investors when we were certain that it would generate positive returns.

I’m happy to share why that day finally came.

Why We Did It

Opportunity.  In 2009, Jake and I emerged from my attic with a minimum viable prototype of our hosted business intelligence product.  Jake hammered the phones and we got our first few customers.  By 2010, we had enough revenue to make our first hire.  We improved our processes and product by leaps and bounds.  Word started to spread and more customers arrived.

By the end of 2010, we had grown the team to four people and moved into a real office in Center City Philadelphia.  In 2011, our customer count exploded, our headcount tripled, and our product got even better.

We got efficient.  We added automated marketing with Hubspot, CRM with SalesForce.com, customer support management with Zendesk, code control with Github, product management with FogBugz, and (of course) robust analytics with RJMetrics.

Thanks to our own product, we were seeing compelling data about customer lifetime value and retention.  This led to the conclusion that the only thing between us and even faster growth was more rapidly iterating on our product and getting in front of even more people. Raising money was the key to going after this huge opportunity as aggressively as possible.

Amazing Investors.  We knew that the right investors could contribute far more than capital.  We spoke to a number of institutional investors and angels, and ultimately decided on an angel syndicate because of the speed, flexibility, terms, value-add, and diversity they were able to provide.

We were fortunate to be oversubscribed almost immediately.  This gave us an opportunity to be selective about the partners we chose.  Naturally, everyone is well-connected, smart, and experienced.  If you look closely, however, everyone who invested also falls into at least one of these categories:

• Actual RJMetrics Users: Almost 100% of this round came from firms or individuals who have used our product extensively.  From Jason Goldberg (Fab.com) to Ben Lerer (Thrillist/Lerer Ventures) to Andy Dunn (Bonobos/Red Swan), these investors had done their product diligence without even knowing it.  They will bring practical, in-depth insights to our product development strategy from day-one.
• Stellar West-Coast Investors: Silicon Valley is underrepresented in our customer base, and we see that as a huge market for us in the coming year.  Funds like SV Angel and SoftTech VC give us a west-coast presence and bring credibility, strong networks, and valuable regional expertise to the table.
• SaaS and Lean Startup Experience: Raising money doesn’t mean we’re going to abandon our mantra of capital efficiency.  Investors like Mark Wachen (Upstage Ventures) and Gabe Weinberg have personally built and exited technology companies without depending on outside investors to survive.  Their expansion-stage experience will be invaluable as we take things to the next level.

Why We’re Excited

We Love Doing This.  Every day, we learn something new, interact with the smartest group of people we’ve ever known, and build something that changes the way people think.  There is much, much more that we can do and nothing makes us more excited than working to turn those dreams into reality. This funding is only going to make that happen faster.

We Love Philadelphia.  As we detailed earlier this month, we are proud to call Philadelphia our home and we’re excited about the emerging start-up culture here.  We are also proud to be bringing brand-name capital from both coasts into the Philadelphia technology community.  These dollars will be spent on cultivating local talent, creating jobs, and growing our hometown brand on the global stage.

We’re Just Getting Started.  Raising a round of capital is not the finish line– it’s the starting pistol.  We’ve been working on this company for three years now, but we continue to start each day hungrier than ever.  So, don’t say “congrats.”  Say “good luck.”  And stay tuned.