Today, we announced a big step for Front: we’ve raised $65M in Series D funding, led by Salesforce Ventures. Other participants in the round include Battery Ventures, PagerDuty CEO Jennifer Tejada, and existing investors Sequoia Capital, Threshold Ventures, and Uncork Capital. This round values Front at $1.7B and brings our total fundraising dollars to date to $204M.
In two days, I’ll publish a post with our Series D deck as well as the main learnings I got from raising in this new macro environment, as I’ve done after all of our previous rounds. For now, I’d like to take a moment to step back and share with you what’s been top of mind lately.
If I could do it, so can you
Before I get to the meat of this article, allow me one quick aside. While there are no inherent differences between men and women leaders, there’s obviously a big difference in gender representation across STEM, the tech industry, startup founders, CEOs, and VCs. PitchBook notes female founders secured only 2 percent of venture capital in the U.S. in 2021, the smallest share since 2016.
In this environment, Front is a bit of an outlier. It was co-founded and is led by a woman, with 80% women in executive roles, 50% in management, and now an additional woman investor, Jennifer Tejada of PagerDuty. We’re continuing to help women pave career pathways that reflect what they want to achieve and help them scale great ideas (and PSA, we’re hiring across many teams -- men and women!). We’re joining a very tiny club of 11 SaaS "unicorns" (out of 1,360 tracked by Crunchbase) to be co-founded and led by a woman, but still, we did it!
So even though I don’t love playing the gender card, I think it’s important to mention it today, in hopes that Front can be a company that leads by example. My goal is to push more women over the edge to take risks, believe in themselves, and pursue every idea they want to grow.
Start (again) with why
2.5 years ago, when we raised our Series C, I mentioned that with every new round, it doesn’t get easier. I knew it wouldn’t this time either, especially in this new environment: the next few years will require a lot of hard work and flexibility from CEOs and leaders. So I needed to ask myself why I was doing this, why it mattered that Front succeeds, and how I can best facilitate that success.
Here’s how I answered it. Every time someone asks for advice on how and when to raise money, I mention that it’s important to have achieved a significant milestone and have your sights on the next milestone you intend to reach with the additional funding. If I had to sum up these milestones for Front, that would look like the following:
Seed: we’re a good team with a large market opportunity
Series A: we have proof of product-market fit ($1M ARR)
Series B: we have leverage (we know how to spend money to grow faster)
Series C: we understand our market, which unlocks new levers of growth (for example: outbound, upmarket)
Series D: we understand what’s unique about our position in this market, and why our mission matters more than ever
To understand the last point, it helps to know Front’s mission: to enable better relationships at scale. We make customer communication software that helps businesses build valuable, lasting, humane relationships with their customers. That might sound straightforward, but it took us a while to get to this level of clarity. Customers from seemingly very different industries were coming to us and asking to buy our product: finance teams, support teams, logistics companies, all types of professional services, B2B tech companies, and more. At first, we didn’t understand why they couldn’t be served by other, older vendors, or what they found was so different about Front.
All in on relationships
After careful study, we found the common thread: these businesses all differentiate on relationships. They all strive to deliver great products and services, but they know that they can derive significant value if they can maintain strong relationships with their customers. And they weren’t impressed with the technology they saw before Front. Everywhere they looked, technology delivered the opposite of what they wanted. It was used to turn rich, nuanced, durable relationships into mere transactions.
That’s why our best customers are so suspicious of help desks. These systems are designed for a world of transactions. Ticket numbers instead of names. Deflections to somewhat unrelated self-help articles. Chats with "smart AI agents." They make you even less connected with your customers, not more. It saves on costs, but it can erode trust, which will kill the relationship in the long run.
As it turns out, the businesses that were drawn to Front didn’t hate technology, it’s just that technology hadn’t been designed to help them compete where they needed to compete. Front is built differently -- it’s invisible to the customer. Every message is native to the channel it’s sent on, whether that’s email, SMS, Twitter, or any other message. The conversation is at the center of your team’s focus, and it’s surrounded by all the tools that will help make it flow faster and better: comments and collaboration, CRM data, scheduling, integrations with domain-specific services, and more.
We can finally help these businesses scale what they thought couldn’t be scaled: their human touch.
Putting all of that into words was a big boost of motivation for me. Few things interest me more than improving interpersonal relations. But beyond my own perspective, the timing of this realization makes it even more important. We serve businesses in finance and in logistics that are at the center of the current economic turmoil.
Between the ongoing pandemic and the current economic environment, all industries are affected by uncertainty: in the 2020s, the only constant is change. Businesses have to be fully available to their customers. Many won’t be able to grow staff. Technology like ours is a major lever for them, a silver lining. Thanks to this round of funding, we’re committed to supporting them long into the future.
Written by Mathilde Collin
Originally Published: 28 June 2022