Cracking the Churn Code:

Between 2022 and 2024, the SaaS startup scene shifted from rapid growth to high capital efficiency due to a significant decrease in available venture funding. What this means for B2B sales: Less focus on outbound sales activities to attract new customers, and higher focus on customer retention and upselling. For good reasons: Studies show that even a 5% increase in retention can result in a 25-95% boost in profits. Yet, customer retention remains the “ugly duckling” of sales, suffering from manual and fragmented workflows. Venmate wants to change this by offering a comprehensive and data-driven operating system for customer retention. Since their start in December 2023, Venmate has quickly gained traction showcasing a promising investment opportunity amidst the demand for effective customer success solutions.

The people behind Venmate

Venmate's journey began with a promising setup: The founding team consists of Felix Benscheid and Leopold Holstein. They met during their time as "Venture Architects" at Berlin-based company builder Bridgemaker, while jointly building a corporate venture. Their time at Bridgemaker proved to be a fertile breeding ground to learn all the skills required to build a startup. Both founders have a business administration background and are skilled in all commercial areas such as sales, finance, or product strategy. The need for tech and coding expertise is filled by CTO Maxim Svistunov, a versatile tech professional who has gained experience in tech leadership roles at several software startups prior to joining Venmate.

How Venmate’s solution aims to secure customer loyalty

The founders initially encountered the challenges and potentials of customer success management first-hand when building their corporate startup. Customer success management is based on different data points including the frequency of feedback calls, the sentiment or gut feeling of the respective key account manager, usage data, surveys, or Zendesk requests. Yet, these data points usually remain in silos. As a result, many companies are not aware of churn risks or upselling potentials. This is mirrored by anecdotal evidence. In our own experience, most founders are taken by surprise when customers churn. The usual reaction: “I did not see this coming.” – followed by a root-cause analysis and the realization: “I could have seen this coming.” Without a more data-driven approach to customer success management, the potential for preventive countermeasures remains unused.

In general, the market for sales software tools is a shark tank. However, a closer look reveals that major providers of CRM tools such as Hubspot, Pipedrive, or Salesforce focus on the process of acquiring new customers. This process "ends" with the acquisition of the customer. What follows is a switch to process management tools like Asana or Monday for onboarding. Additionally, there are individual tools for surveys (e.g., Typeform), while conversation notes are often stored in the CRM tool. Usage behavior is mostly tracked within the software itself and analyzed via Mixpanels. Venmate combines these different data points to compute a “health score” for every individual customer, with detailed analyses and suggestions for improving the score. As such, all these analytical tools are complementary to Venmate. Venmate allows companies to gain a better overview of their customer bases and to efficiently steer retention activities based on actual needs.

Why we invested in Venmate

The market for customer success management software in Europe is largely untapped. Competitors such as Gainsight or ChurnZero are US-based and offer rather complex software suites that do not cater to the needs of small- and medium-sized businesses. The only European competitor, Swedish startup Planhat, has not significantly ventured to central Europe. Together with the growing need for data-driven customer retention, we see a strong window of opportunity for Venmate. We believe that the founders bring the right skills and expertise to build a European champion in the space, based on their previous experience and professionalism. Clearly, Venmate will have to deliver on their promises over the coming months and years, but the positive feedback from pilot customers, the success of Gainsight and ChurnZero in the US, as well as our own experience in working with the founders give us confidence.

Venmate and xdeck

We initially met Venmate as part of the scouting activities of our accelerator program. Quickly, we became convinced of the potential and decided to invest in Venmate’s pre-seed investment round, together with our friends at Caesar Ventures. We can’t wait to contribute our little part to growing Venmate into a European customer success management champion.

"We partnered with xdeck.ventures due to our closely aligned values and vision, as well as xdecks exceptional network, expertise in accelerating early-stage startups and hands-on working style. They are the perfect partner to help us grow and innovate.”

Leopold zu Schleswig-Holstein, Co-Founder Venmate