We are excited to cover Reef in this edition of our Why We Invested series! Reef, our most recent investment out of Fund II, is a customer revenue platform that optimizes how customer success (CS), sales, and revenue operations (RevOps) teams collaborate and leverage data to significantly increase net revenue retention (NRR).
The Story Behind Reef
With seven years under his belt running CS at MuleSoft, Brent Grimes founded Reef with the goal of helping customer teams boost NRR by equipping them with data-driven metrics and actionable insights.
At MuleSoft, Brent uncovered various revenue retention challenges that the CS and sales teams were running into as the company quickly scaled. These struggles included poor cross-functional collaboration mixed with a lack of investment in technology infrastructure to support customer expansion goals, which ultimately resulted in lackluster NRR performance for the company. To combat these obstacles, Brent built and implemented an internal revenue expansion strategy at MuleSoft that mined customer data sources and plugged them into a proprietary customer regression model. The model then accurately determined which customers were most likely to churn or grow their account value (through cross-selling and upselling) and gave each customer a health score. After launching the internal tool, MuleSoft significantly increased NRR, improved its renewal rate, and grew average ARR under management by 2.5X per CS manager. These impressive results led to the acquisition of MuleSoft by Salesforce for $6.5B. Given his immense success at MuleSoft and distinct advantage in understanding revenue expansion, Brent had the conviction he could productize his solution and build Reef.
How Reef Supports Customer Teams
Based out of Honolulu, Brent partnered with Corey Goff, Reef’s Head of Engineering and Product, to build Reef. Together they are equipping customer organizations with the exact tools they need to orchestrate and increase NRR based on real customer data. The platform integrates with a company’s customer data sources, such as CRMs like Salesforce and HubSpot, and product analytics solutions like Pendo and Amplitude to automate workflows based on live data. Reef ingests this customer data to evaluate end-client product usage, breadth and depth of usage, and total coverage of the product being used (looking for scenarios in which a customer might only be using one product feature and missing out on the product as a whole).
It doesn’t stop there though, as Reef doubles down by connecting with communication tools like Gmail, Google Calendar, and Mailchimp to assess how customers interact with a company’s CS and account management teams. Reef collects relevant patterns, such as tracking how many times a meeting is declined or accepted by a customer in a quarter, and incorporates these trends within its scoring model. Similarly, Reef integrates with customer support systems like Zendesk and builds any support-related trends into the engagement score. With this data, Reef automatically generates a holistic customer engagement score that signals which customers to target for upsell, cross-sell, and renewal actions.
Utilizing these engagement scores, Reef creates visualizations mapping each individual customer on a customer engagement heat map. The heat map identifies customer “hotspots” for engagement and easily points out which customers are at risk of churning and which are likely to grow. Reef users are able to toggle the heat map and filter by customer industry, organization size, revenue potential, existing contract size, and many other variables. The engagement score is then paired with a recommended best path forward to support a company’s customer-facing team as they address any issues identified with their end-clients.
With each customer engagement score, Reef provides templatized playbooks and sprints that help customer teams execute on Reef’s insights. Each playbook houses a step-by-step guide with recommended specific actions for a company’s customer team to follow. While Reef users can fully customize playbooks as they see fit for their organization, they are able to utilize a deep roster of Reef-built templates that leverage Brent’s extensive experience in the revenue expansion space. Layered on top of each playbook are sprints that guide customer teams in how to take specific courses of action. Typical actions within a sprint include automated outbound communication, meeting scheduling, material preparation, and much more depending on the end-customers’ engagement score. Sprints are innately collaborative and have the flexibility to include team members across sales, CS, and RevOps teams.
For managers and senior leaders, Reef’s platform allows them to get a bird’s-eye view of sprints to help monitor progress against a given overall revenue expansion strategy. Individual customer-facing employees, like a customer success manager or account executive, can also create personal sprints that provide accountability towards revenue-related activities within specific accounts. Initial Reef users realize the tool’s value almost immediately and invite their colleagues to collaborate on the platform to complete sprints. Accordingly, the Reef team has already built a strong customer base of rapidly growing SaaS companies in a variety of industries as well as a strong pipeline of prospective customers. We expect the Reef team to continue to be successful onboarding more customers and building pipeline as they launch new tools and product offers.
The Time for Reef is Now
The importance of NRR has emerged as the definitive metric of success for SaaS companies according to ChurnZero’s 2022 market report, yet there continues to be a clear lack of tooling available for customer organizations to productize their revenue expansion strategy. The need for a platform like Reef has only been exacerbated by the tremendous headcount growth in CS, sales, and RevOps over the past few years. As reported by Gartner, the market demand for a customer revenue retention platform is represented by 25,000+ SaaS companies globally totaling a projected SaaS spend of $135B in 2023, and a customer revenue market of $30B in 2026. Realizing the ever increasing need for companies to optimize the way they navigate and manage existing customer health, Brent felt compelled to create the solution.
Struck Capital is thrilled to have led Reef’s $5.2M financing alongside Builders, SBI, Dig Ventures, CEAS and other strategic investors. The gap in the market for a solution like Reef is only becoming more obvious as the number of SaaS companies continues to explode. Brent’s distinct advantage in understanding the customer profile, buyer persona, goals, and the associated selling motion into these companies makes him the perfect person to address this massive market opportunity. We are incredibly bullish on Reef’s ability to transform the way customer teams engage with existing customers and we are eager to support them as they continue to rev their net revenue retention engine.