Sunday, September 1, 2019

Enterprise Software Startup Ally Nabs $8M to Support Global Growth - Xconomy

Enterprise Software Startup Ally Nabs $8M to Support Global Growth - Xconomy


Enterprise Software Startup Ally Nabs $8M to Support Global Growth - Xconomy

Posted: 19 Aug 2019 12:00 AM PDT

Ally, a startup developing software to help businesses chart strategies and track progress toward meeting goals, announced Monday it has raised $8 million from investors to support the Bellevue, WA-based company's growth.

Palo Alto, CA-based Accel led the Series A round, Ally says. Other participating investors included two Seattle-based venture capital firms, Founders' Co-op and Vulcan Capital, and angel investor Lee Fixel.

Ally, which Vetri Vellore founded last year and leads as CEO, says his startup has raised a total of $11 million in outside funding.

"We're going to scale the business across the board [and] invest in engineering, product, sales and marketing," Vellore says.

Microsoft (NASDAQ: MSFT) has been a dominant force in enterprise software for decades. Still, the rapid rise of companies like San Francisco-based Slack (NYSE: WORK), which sells enterprise communication software, suggests it's possible for startups to make inroads in the industry. Microsoft created its Teams product to offer its enterprise customers a Slack alternative.

Vellore worked at Microsoft for 14 years, and had stints as a director and product unit manager at the software giant. In 2007, he left Microsoft in to launch his first startup, Chronus. That company, which is also based in Bellevue, develops software to help facilitate mentoring and coaching of employees at their jobs. Vellore is still a member of Chronus's board of directors, but is no longer overseeing its day-to-day operations.

Ally's products, meanwhile, are designed to let business leaders set long-term strategic initiatives based on a framework of "objectives and key results," or OKR, Vellore says.

Businesses have used the OKR goal-setting method for decades, he says. However, the approach started receiving more attention after companies like Alphabet (NASDAQ: GOOGL)—and one of its early investors, John Doerr of Kleiner Perkins—spoke publicly about using the OKR framework. Doerr's book "Measure What Matters," published in 2017, has created additional buzz, Vellore says.

Ally makes money under a software-as-a-service business model, wherein it charges customers monthly or yearly fees to use its products.

The startup has customers in more than 70 countries, according to company materials. They include Slack, T-Mobile (NASDAQ: TMUS), WellStar Health System, and Remitly, an upstart money transfer service.

Vellore says that at Remitly, which is growing quickly but by most standards is not an especially large organization, Ally's software is used to gather input from—and information on—employees at all levels.

"You start thinking about, 'What are your strategies for the next year—or maybe even three years?,'" Vellore says, explaining how some Ally customers use the software. "Strategy, plan, objectives get captured in this OKR structure. What are the various things we need to do, and each department needs to do? You can go all the way down to a front-line employee: what is the employee doing, and why they are doing it?"

Ally's products can be integrated with Slack, Salesforce (NYSE: CRM), and other collaboration tools to automatically update progress on initiatives in Ally based on progress logged in a customer relationship management software application, for example.

Those integrations hint at one of Ally's long-term goals, Vellore says, which is to allow users to not only document what they want to accomplish, but also tell them how well-positioned they are toward meeting the goal.

"You've got to understand both sides of the equation: what you're doing, as well as where things stand, to run your business effectively," he says.

Ally currently has about 25 employees, who are split about evenly between its Seattle-area headquarters and satellite offices in India. Vellore says his startup's goal is to grow to 70 employees over the next 12 months.

"There is global demand for a product like this," he says. "We want to increase our global footprint."

Jeff Buchanan is the editor of Xconomy Seattle. Email: jbuchanan@xconomy.com Follow @_jeffbuchanan

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How this ex-Microsoft director launched a spa and salon software startup that has raised $91M - GeekWire

Posted: 22 Aug 2019 12:00 AM PDT

Zenoti's spa-management software was designed around mobile devices. (Zenoti Photo)

Sudheer Koneru thought he was pretty much done working.

After stints at Microsoft and SumTotal Systems, Koneru considered himself semi-retired, or at least on a break, in mid-2008. He traveled and participated in yoga and wellness workshops.

But about a year later, he was thrust back into duty after a company he invested in several years earlier that ran a chain of health clubs, spas and salons in India underwent a management change. He thought taking on a more active role in the company "would be a fun thing to do" and didn't treat it as a career move.

Sudheer Koneru, co-founder and CEO, Zenoti (Zenoti Photo)

What the veteran software engineer didn't know was his time working in the spa and salon world would bring him back to the tech scene and serve as the genesis for a company that has become one of the top Pacific Northwest startups.

Koneru is CEO of Zenoti, a Seattle company that sells an enterprise software platform for the fitness and beauty industries. The startup announced a $20 million investment round today from Steadview Capital. It comes on the heels of a $50 million round Zenoti raised in May led by Tiger Global Management, a New York-based firm known globally for making long-term investments in companies including Spotify, Facebook, LinkedIn, Flipkart, and other tech giants.

Zenoti has now raised more than $91 million in its nine years of existence. The company is ranked No. 20 on the Geekwire 200 list of the top Pacific Northwest startups.

Zenoti wasn't looking for additional capital, but Steadview's proposal was a strong one. Zenoti will use the funds to further expand into the U.K., possibly by acquiring smaller spa and salon technology providers there. Koneru added that Zenoti still has a lot of work to do to accomplish its goal to "own the entire backbone of the industry."

From Microsoft to the beauty industry

Back in 2010 while helping run the spa and salon business, Latitude Pro, with his brother Dheeraj, Koneru learned the ins and outs of the industry.

"I was pretty hands on to the extent of knowing the life of a personal trainer, knowing the life of a receptionist, how the spa employees worked," Koneru said. "It was almost like an alternative lifestyle from what I had done before."

One of his biggest takeaways was the industry lacked quality software for managing scheduling, marketing, inventory and operations. Like any enterprising engineer, Koneru identified this problem and sought to fix it. That led him and his brother to sell off their stakes in the spa and salon chain and start Zenoti.

Dheeraj Koneru, Zenoti co-founder.

In addition to the cash infusion, Zenoti today announced a major new customer: Hand & Stone Massage and Facial Spas. The deal brings more than 400 stores in the U.S. and Canada on to Zenoti's platform as the new technology partner for point-of-sale, digital marketing and analytics. With this new alliance, Zenoti now has more than 1,000 companies using its platform with a combined 7,000 stores.

The key metric that Zenoti uses to measure the health of its business isn't the number of stores on it's platform — it's annual recurring revenue. Koneru wouldn't give a dollar figure, but he did say that annual recurring revenue grew roughly 120 percent last year, an impressive figure for a 9-year-old company.

Zenoti has roughly 350 employees. The management team is based in Seattle, and the company has about 60 people in the U.S. Another 250 people are based in India.

Zenoti just hired Guy Weismantel to serve as senior vice president of marketing. Weismantel last worked as chief marketing officer at PushPay. His resume also includes big names such as Microsoft and Egencia, the corporate travel division of Expedia.

Koneru attributed the company's continued rapid growth to a lack of true competition. There are a lot of software tools to help standalone health clubs and salons manage their business. But there aren't a lot of options for bigger chains to manage hundreds or even thousands of stores easily through one platform.

That's where Zenoti comes in. Koneru used Starbucks as a model for what Zenoti wants to accomplish. The coffee giant has a unified solution with its app that works across all its stores and makes it easier for the company to learn more about the business.

"With Zenoti, there is only one card on file; there's only one menu across the business; and you can go pay anywhere and get your points anywhere," Koneru said. "You're treated as one integrated customer for the brand, as opposed to a customer at ten different outfits."

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