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B2B companies focus a lot on acquiring customers and collecting their information using a CRM or customer data platform. But there may be less emphasis on satisfying existing customers and continuing their sales. This is where customer success software comes into play.
Two customer success companies, Let’s go And Catalystannounced its merger on Wednesday with the aim of competing with the market leader, Gainsight.
One of the nice things about this deal is that no money changes hands; rather, it’s about combining the two entities to leverage each company’s strengths. The goal is to build a stronger company together, one that the parties involved believe could go public if all goes well.
“Everyone is very excited about the potential of these two companies,” Edward Chiu, CEO and co-founder of Catalyst, told TechCrunch. “So everyone is investing in this new business and I think that’s why there’s so much confidence and enthusiasm, because everyone thinks this is going to be a big category creator.”
Chiu said that when Totango’s owners, private equity firm Great Hill Partners, approached him, he saw two companies that would fill each other’s gaps. “We need more enterprise customers, and they need our ability to drive innovation and ingest data very quickly,” he said. “Part of this is that we are in a unique position to take the best features of both companies and merge them into a single platform,” Chiu said.
The combined companies will come together under Great Hill, and Chiu and Totango’s Alistair Rennie will remain on board as co-CEO to lead the new organization. Rennie sees the current market uncertainty as an opportunity for the new company to help its customers preserve revenue through retention, renewals and expansion by combining Totango’s enterprise features with the more advanced interface. modern technology and the AI capabilities of Catalyst.
Great Hill managing director Christopher Gaffney says the category is intriguing and bringing the two companies together creates an opportunity to overtake the market. “The combination of Catalyst and Totango aims to capture a critical market opportunity and set a new standard in maximizing post-sales revenue,” Gaffney told TechCrunch. “Totango’s deep customer success expertise and enterprise capabilities, combined with Catalyst’s intuitive design and forward-thinking vision, create an engine to redefine customer success and how businesses maximize success. customer lifetime value. »
Jessica Lin, co-founder and general partner of Work-Bench, whose firm invested early in Catalyst, sees a similar opportunity. “Our goal is for this combined entity to capture the customer success market and achieve even greater results than Gainsight (which disappeared at the end of 2020). for $1.1 billion). This is why we do not want a cash payment now, but prefer to see the continued rise of our shares in this new joint entity,” Lin said.
Chiu noted that both companies had conversations with their customers before the merger and received a lot of positive feedback from both sides. Over the coming months, the companies will continue to operate separately, but they are already merging and ironing out the technical and operational details that this entails.
Totango launched in 2010 and has raised $146 million along the way, by Crunchbase. However, the vast majority of this amount was the 100 million dollars Great Hill invested in the company in 2021. Catalyst was founded in 2016 and has raised more than $66 million annually. Crunchbase data.
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