Dallas Venture Capital (“DVC”) Leads a $5M Investment Round into StepFunction

Major SaaS clients use StepFunction to retain and upsell over 2.5 million SMB customers

[Dallas/Irving, Texas, 08/31/2022] - StepFunction, a market leader in SaaS revenue growthsolutions, today announced a $5M post-seed raise led by Dallas Venture Capital (DVC) withparticipation from Hummer Winblad Venture Partners, Inventus Capital Partners, and Z5 Capital.

McKinsey research indicates that SaaS companies that focus on cross-selling, upselling, andretention can achieve a 20% yearly increase in growth without having to add a single newcustomer, and in turn a substantially higher valuation. Providing services to thousands of techtouch/low-touch customers makes it difficult for SaaS companies to distinguish between thoseready for upsell or those with a high risk of churn. Relying on heuristic rules and humanexperience to ascertain customers’ health score is unreliable and prone to bias.

Using machine learning, StepFunction helps leading SaaS companies substantially improve theamount and predictability of their subscription revenues based on a data-driven, real-timeunderstanding of customer intent. Unlike other solutions, StepFunction can tune the engine tomeet the clients’ specific priorities – whether it be improving monthly recurring revenue (MRR),improving net recurring revenue (NRR) by reducing churn, an increase in cross-selling, or othermetric.

Launched in 2020, the StepFunction Customer Intent Engine (CIE) ingests an extensive range ofcustomer behavior signals — for example, product usage, support tickets, survey feedback, CRM,social media signals — over a long period of time. From this, StepFunction can deduce endcustomers’ intent in real-time and infer the associated risks or opportunities to improvecustomer retention and growth with higher customer satisfaction. The business benefits of thisapproach are substantial: top-line growth through increased customer retention, reduced churn,and targeted upselling; reduced cost of reaching out with pinpoint customer targeting; andimproved margins.

To date, major SaaS clients have used StepFunction to retain and upsell more than 2.5 millionsmall- to medium-sized businesses (SMBs).

Marina de la Torre, vice president of customer success at Mitel said, “StepFunction predictivetarget hotlists have been a game changer for us. We have reduced costs while greatly improvingsave rates. Our CSM team uses their explainable AI to directly drive CTAs and proactively reach our long-tail customers. We have even expanded the deployment to all six of our product lines.”

“The market opportunity for a holistic SaaS Growth solution that solves the problems of retention,upsell, cross sell, and conversion has never been greater as most large SaaS operators areunaware of their end-customers' current intent," said Navneet Singh, CEO and co-founder atStepFunction. “By providing a data-driven, real-time read on customer intent, StepFunctiondelivers early and accurate customer targeting for companies to take effective remedial action.We are delighted to have found a partner in DVC that sees the value in our advanced solution andlook forward to collaborating further as we embark on our next phase of growth.”

“Revenue growth for B2B SaaS companies is a function of value creation for their customers,which is difficult to measure. StepFunction's AI-powered customer intent engine helps solve thisexact problem,” said Dayakar Puskoor, founder and managing director at Dallas Venture Capital."StepFunction delivers deep insights, actionable analytics, and growth predictions for SaaScompanies to fuel their topline growth. We are excited to be on this journey with StepFunction tohelp them scale through DVC Advantage."

This post-seed funding will enable StepFunction to expand into new SaaS verticals such assecurity, information technology, and cloud storage. StepFunction will also grow the company'sgo-to-market capabilities and product development teams globally, tripling in size and revenue bythe end of next year.

About StepFunction

StepFunction’s mission is to make SaaS operations a science by applying advanced analytics tocustomer behavior signals and operational data. The StepFunction Customer Intent Engineleverages machine learning to empower SaaS clients with data-driven, real-time, and actionableinsights to retain and upsell to the right customers. With bullseye targeting, SaaS clients canachieve top-line growth through increased customer retention, reduced churn, and targetedupselling; and improve their bottom-line by reducing costs to reach customers.

About Dallas Venture Capital

Dallas Venture Capital (DVC) is a Dallas/Irving, Texas based venture capital company with a focuson investing in early-stage enterprise B2B software companies and ambitious entrepreneurslooking to partner with investors who have been in their shoes through hands-on support in theareas of product and market development. DVC was founded by Dayakar Puskoor, a pioneeringDallas-based venture capitalist with a record of investments in twenty-five companies and sevenexits to date. Some examples of DVC’s investments include: Citylitics, Disprz, Lucy.ai, Rollick,plnar, CoreStack, Viviota, AmplifAI, Kore.ai, HyperVerge, Glympse, and Altia Systems. DVC hasoffices in Dallas, USA & Hyderabad, India.

For more information on DVC, please visit www.dallasvc.com

Contact:

Sujay Chebbi
pr@dallasvc.com
sujay@dallasvc.com