For Bengaluru-based SaaS platform Whatfix, the year 2o20 changed the way it looked at business. Existing clients buying additional services from the company grew from a mere 10% of new bookings in Q4 of 2019 to nearly 35% of new bookings for Q4 of last year.
What helped this growth, according to cofounder and CEO Khadim Batti, is the way Whatfix scaled offerings, created new use cases and found common grounds for application across enterprises.
The pandemic, which has put digital transformation initiatives in high gear across industries, has accelerated Whatfix’s adoption as companies look for tools that ease workflow.
Whatfix provides in-app guidance for web applications and software for enterprises. Or, as Batti explains, the platform is the Google map for navigating the software and apps for employees.
“On an average, large enterprises have more than 1,000 software apps. They spend millions of dollars on digital transformation. When you have so many software, the enterprise can see a return on investment only when the employees start utilizing the software and that is when the adoption becomes key,” Batti told TechCircle.
After remote work, Whatfix started scaling its product to cover 50-100 software in an organisation. The Sequoia and Eight Roads Ventures backed company also started building more use cases across applications to move from a guidance tool to an adoption layer.
“For example, a sales person in the company starts building contacts on the CRM but once the opportunity matures, he wants to create a contract. For that he moves to contract lifecycle management tool or a quotations tool. At the end of the quarter, he would like to go to the performance management tool to take stock. We are streamlining the process,” Batti told TechCircle.
Another opportunity to scale came in the form of shared pain-points of remote work which were important for Whatfix as well as other organisations. Providing a checklist of things-to-do while using collaborative tools, such as keeping video on during client calls, or similar nudges is something all companies were looking for and Whatfix decided to share the solutions it had developed for its employees with its enterprise clients.
Revenue and growth
Whatfix clocked in 100% growth over the last financial year. And, according to Batti, Whatfix is set to achieve similar targets for the financial year 2020-21 as well. For FY 2019-20, the company recorded net sales of Rs 62 crore, up 125% from the year before period. However, the B2B solutions provider also widened its losses by nearly 300% to Rs 55.2 crore before tax for financial year 2019-20, according to data on VCCEdge.
The company cofounded in 2014 by Batti and Vara Kumar has raised $50 million in equity capital so far, with its Series C round of $32 million led by Sequoia Capital closing right before the pandemic hit in February 2020. The company has sufficient capital to wait a few quarters and build out its product, says the CEO before hitting the road to raise a new round.
“Around 95% of our deals are annual contracts and 5% are multi-year contracts where clients pay upfront. That is a good enough scale without burning much,” he said.
The company’s employee benefit expense grew 217% for the year to Rs 78.82 crore while other expenses which include the company’s advertising and marketing spends rose by 165%.
Whatfix, which is owned by Quicko Technosoft Labs, has been on a hiring spree. While hiring was cautious in the months of March and April 2020, Batti says that the momentum was back by May 2020.
“From 200 people last year, we at 450 now and continue to keep that momentum,” he said. Of these 80% are in India while the rest have been hired across existing and new geographies the company is going deeper in.
The US, which is Whatfix’s primary market, has close to 30 people. The company is also focusing on Germany through which the company is looking to go deeper in the European market. It has also hired a team primarily in Australia and Singapore to serve the Asia-Pacific (APAC) market.
The revenue share from geographies has also changed as a result of the pandemic says Batti. As compared to 85% revenue coming from US in Q4 of 2019, the share of US market for Q4 2020 has come down to 65% he says.
“The contribution from continental Europe has increased and not just from UK and Germany. Australia has grown substantially to 5 to 6% (of revenue contribution) overall which was APAC combined earlier. Even some enterprises in India have started showing interest, such as fast growing tech companies,” he said adding that there have also been inquiries from Thailand and Vietnam.
In order to fuel inorganic growth, the company is also scouting for adjacencies and complementary technology companies for acquisition. In 2019, it acquired Delaware based Airim, an AI-enabled personalisation engine which helped Whatfix boost its engagement, says Batti.
“Other areas which are complimentary will be conversational interface or behavioural analytics, customer experience survey and similar areas. If we find the right tech companies, we might be open to looking at acquisitions,” he said.