Braze

Bill Magnuson and the Braze team saw a fundamental opportunity in 2011: mobile was transforming how brands communicate with customers, and most companies lacked the technology to engage at scale. They recognized that the app store and global distribution platforms were enabling startups worldwide to scale rapidly, but these businesses needed better tools to maintain customer relationships across multiple channels. This insight sparked the creation of Appboy (later rebranded to Braze), a platform built to be the backbone of customer engagement for consumer-scale enterprises.

The founders took venture capital from the onset, raising $40M over the first six years as they carefully matched growth to market opportunity. Bill became co-founding CTO and later transitioned to CEO about two years before this interview. The team built Braze as a pure SaaS platform, starting with a focus on mobile-first companies and early digital-first brands that needed to coordinate messaging across channels like mobile push, email, web, and owned channels.

Braze's early customer base was notably global—more global than even their investors expected. The early customers in 2013–2014 were primarily mobile-first and digital-first startups scaling internationally. As the company matured, it shifted focus toward larger enterprise customers, diversifying beyond digital-native companies into traditional Fortune 500 brands. By the time of this interview, the customer base had grown to over 600 clients with average annual contract values (ACVs) of $100k+, spanning multiple verticals and regions.

Several factors drove success: (1) A strong expansion motion within existing customers. Starting with a single channel or product, Braze would gradually expand to cover all customer communication as clients grew, leading to 10–20x growth from some early customers. This expansion drove net revenue retention of roughly 140%, meaning the company was growing from existing customers nearly as fast as from new ones. (2) A dedicated account management function, added only in the last 2–3 years, significantly improved retention and expansion. (3) Deep internal dogfooding: Braze used its own product for lifecycle communications with prospects, customers, and employees. (4) Disciplined capital allocation. Having raised less capital than competitors in the first five to six years, the company maintained strong unit economics with payback periods between 16 and 24 months depending on customer archetype. Gross revenue churn was around 5–10%, varying by region and customer segment.

As of the interview (December 2018), Braze had scaled to $60M ARR ($5M/month run rate), up from $30–35M a year prior, representing ~70% year-over-year growth. The company had raised $170M total (an additional $130M in the prior 18 months alone) and employed roughly 300 people globally. Management anticipated reaching $100M+ ARR within the next year. The company remained profitable in unit economics and was focused on consolidating customer communication across enterprise silos—a trend they were seeing increasingly across all verticals. With a 16–24 month payback period and strong renewal economics, Braze was positioned as a healthy, sustainably growing enterprise SaaS company.