One of our key focus areas at 645 is investing in Citizen Professional companies, broadly defined as those that leverage technology to service non-technical individuals and empower the average knowledge worker to replicate the skills of an advanced expert. We’re convinced that this category will produce multiple billion-dollar companies over the next decade. This is because Citizen Professional companies create very large markets that were previously unaddressable to the average user due to technology complexity. They also enable SMBs and solo-preneurs to replicate the capabilities of large enterprises using software. We’re excited to announce our investments in two companies within this thematic area: Navattic, an interactive demo platform, and Apty, a digital adoption platform.
We first met the founders of Navatticin March, as members of Y Combinator’s Winter 2021 cohort. We were instantly impressed by the team as well as the product. Navattic’s software meaningfully improves the experience of selling a product or service. The platform allows non-technical users to create personalized, interactive demo environments, fitting squarely into our Citizen Professional thesis. With Navattic, any seller or marketer can showcase immersive product value, without burdening their technical colleagues. These environments, which can be delivered asynchronously, allow buyers to get a hands-on feel for products without the hassle of a live conversation, cutting down both customer friction and sales cycles.
The need for the experience that Navattic is enabling is stronger than ever. New distribution methods such as product-led growth (PLG) continue to change customer expectations of how software should be bought, and sales-led companies are rushing to catch up. This behavioral shift, which we discuss in our post on “Customer Led-Growth”, has invited strong demand for Navattic’s product from both PLG and sales-led companies alike. For this reason, the company has scaled quickly to over 70 happy customers.
Navattic’s co-founders Neil McLean, Chris Hoyle and Randy Frank, have direct experience with the problem they are solving. All three founders are technical and have spent time as solutions engineers and developers. They are intimately acquainted with customer pain points and have showcased acute customer awareness, scrappiness and technological innovation to-date. We are proud to have led the company's Seed investment in April 2021, and have been incredibly impressed with the team’s performance and success to-date. We look forward to continuing to work closely with them along their journey.
In addition to improving the buying process through Navattic, we realized there are significant opportunities to improve how customers generate value from software after they purchase it. One of the ironies of today’s software industry is that while software spending has grown dramatically, wasted spend has grown right along with it. Cleanshelf estimates that more than 30% of software spending is wasted each year.(1) Over the past six years, the average SaaS spend of an enterprise with 1,000+ people grew by over 300%, from less than $1 million to over $4.2 million.(2) That is equivalent to more than $2,000 spent per employee per year, and SMB spending per employee has grown to 3x that level.(3)
One company that is solving this problem is Apty, which develops Digital Adoption Platform (DAP) software targeted at medium to large enterprises and cloud software vendors. Their best-in-class software solution replaces training & services, enabling employees to maximize usage and value from software spend. We’re proud to announce our lead investment in Apty’s $7.5m Series A round, alongside existing investors Reformation Partners and Companyon Ventures.
Apty was founded by Krishna Dunthoori, a founder who has spent his career enabling enterprises to extract more value from their software. We profiled Krishna in our SaaS Founders at Work series earlier this year. Krishna previously founded Excers, a professional services and implementation firm that scaled to over $10m of revenues. His experience in the category led him to found Apty in 2017. Since then, the team has onboarded an impressive roster of customers, including Boeing, Delta, Mary Kay, and Broadcom.
Apty helps companies capture value from their mission-critical software investments by making it easier for employees to use and adopt new software, and also retrain on customized features as the business evolves. In addition to serving enterprises seeking to improve adoption of third-party software for their internal use, Apty also serves SaaS developers looking for a tool to facilitate new customer on-boarding and product training. As a result, Apty plays a crucial role in the relationship between SaaS vendors and clients, ensuring end users are able to extract maximum value from technology investments.
Our investments in Apty and Navattic reflect our broader aim of investing in Citizen Professional companies that empower non-technical workers. These companies reduce the need to hire for specific professional skills, enable workers to complete more advanced tasks, or automate traditionally manual jobs. They can be horizontally-oriented companies such as Apty, or businesses focusing on specific industry verticals, such as finance, healthcare, or real estate.
Please reach out to us if you’re building in, investing in, or thinking about these categories. You can reach us at firstname.lastname@example.org, email@example.com and firstname.lastname@example.org. We’re excited to meet you.
(1) “Cleanshelf 2019 SaaS Trends Report: Enterprises Waste Up to 30% of Annual SaaS Spend,” Cleanshelf, at https://www.prnewswire.com/news-releases/cleanshelf-2019-saas-trends-report-enterprises-waste-up-to-30-of-annual-saas-spend-300915766.html.
(2) “71+ SaaS Statistics & Trends For 2020,” Blissfully, at https://www.blissfully.com/blog/saas-statistics/.