Getting inside of your customer’s mind to understand why they do what they do is invaluable to growing your business. If you can begin to decode their actions and understand their intent, you can cater your products and services directly to their wants and needs, making them feel like you’re telepathic.
Algolia is a software business built to help teams develop unique search and discovery experiences for their customers across all platforms and devices. Their platform helps customers find what they’re looking for, discover new products, and interact naturally with their website.
Algolia is a pure-play SaaS business that charges its customers on an annual subscription basis. According to CEO Nicolas Dessaigne, 80% of the company’s revenue currently comes from enterprise customers with the average paying $80k to $100k annually.
With 6,000 total customers, Algolia is north of $40M in ARR right now, Dessaigne shared on The Top Entrepreneurs Podcast. The business has doubled revenue year over year and is up from $20M in ARR at the end of 2017.
What is Algolia’s churn?
While specifics around gross churn were not disclosed, Dessaigne explained that Algolia takes pride in making sure their engineers are close to the customer. Each week, every engineer must spend at least one day working on customer support and use it as an opportunity to develop new features and improve their core product.
Clearly this strategy has paid off as the business drives approximately 30% revenue expansion within each customer annually and his hit 120% net revenue retention overall. Dessaigne noted that expansion usually comes from increases in usage and newly added features.
Customer acquisition currently comes through Algolia’s sales team with the company aiming for payback with 12 months of signing a new deal.
How much has Algolia raised?
Launched in 2012, Algolia has grown to scale with $74M in total outside capital raised. Confident in the trajectory of the business and the opportunity in front of him, Dessaigne made the decision to raise capital to fuel growth faster. Going forward, the company will look to raise an additional round sometime in 2019 to continue growth acceleration.
Algolia’s team of 300 full-time employees is based in San Francisco, Paris, London, New York, and Atlanta.