Pendo, a platform that accelerates successful product adoption, today announced $150 million in funding to help companies bridge the gap between how users expect software to work and their experience actually using it. Led by B Capital Group, with participation from Silver Lake Waterman and existing investors, the Series F round will fund aggressive global expansion, strategic acquisitions and continued innovation in Pendo’s platform that helps product and IT teams drive adoption of the software they build for customers or provide to internal employees.
The investment brings Pendo’s total funds raised to $356 million and its valuation to $2.6 billion. The company also announced a significant revenue milestone; it has surpassed $100 million in annual recurring revenue.
“The wholesale shift to digital has exposed a gap between user expectations and reality—workers expect business software to be as easy to use as their personal apps, but when was the last time someone called a helpdesk for Instagram?” said Todd Olson, CEO and co-founder of Pendo. “We built Pendo to bridge this experience gap, which is why our growth has paralleled software itself. This new investment allows us to innovate faster to serve product teams and their counterparts in IT, who are responsible for driving successful software adoption.”
Pendo’s growth maps to the rising influence of the Chief Product Officer, one of the fastest growing titles on LinkedIn, jumping 41 percent over the last three years. Initially a more common role in technology companies, traditional businesses are now taking notice, with companies like Walmart, Mastercard, Bloomberg and the U.S. Department of Health & Human Services hiring for the role in recent years. In the Forrester Research report “Research Overview: Digital Product Management”, published for CIOs in July 2020, co-authors Nigel Fenwick and Randy Heffner write, “As your business looks to sell new digital products, your CEO needs an executive with full revenue responsibility for the digital products.”
The chief product officer used to be the only member of the C-suite without a system of record, but with rising influence comes demand for better tools. Just like martech equipped the CMO with data and tools to drive smarter and more efficient marketing, a “product tech” category has formed to equip the CPO and Chief Digital Officer with data and tools to deliver better software experiences. Funding to startups serving product teams quadrupled from 2016-2020.
But it’s not just product teams responsible for ensuring software provides value. In distributed and hybrid workplaces, where the employee experience is increasingly digital, IT teams are responsible for ensuring employees are onboarded and trained to proficiency on the software they use at work. Failure to adopt software in this context means lost productivity, low employee morale and ultimately, attrition. Pendo’s suite of digital adoption solutions enables IT teams to train this increasingly remote workforce how to use the software required to perform their jobs. Demand for those tools is also driving Pendo’s growth.
“Pendo is a pioneer and clear leader in the field of software for product teams, which we’ve seen become increasingly important to enterprises as they grow,” said Rashmi Gopinath, general partner at B Capital Group. “Pendo’s fundamentals, growth and ever-improving product suite further position them for success and global expansion.”
Joining B Cap and Silver Lake Waterman in the round are existing investors Battery Ventures, Meritech Capital Partners, Sapphire Ventures, General Atlantic, Tiger Global Management, FirstMark Capital, Geodesic Capital, IDEA Fund Partners and Contour Venture Partners.
Pendo will bring product and IT teams around the world together this Fall for Pendomonium, an annual conference for learning and sharing best practices for driving software product adoption. The event will be held October 13-14 live in Raleigh, NC. Register here.
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