funnel.io

Frederick Scansy brought entrepreneurial experience and elite credentials—an MBA from Stanford and a master's in engineering from MIT—to his second company venture. Previously, he had co-founded auto quake, an automotive e-tailer that raised $30M, scaled to 120 people, and attracted top-tier VC backing, but ultimately didn't deliver a significant exit. That experience taught him a hard lesson: sometimes you scale too fast. When he and co-founder Made (Chief Commercial Officer) started building funnel.io in 2014, they needed the product to work. There was no financial windfall to fall back on.

The insight behind funnel.io was deceptively simple but powerful. Frederick and Made spoke to small and large companies alike and heard the same story: everyone was using spreadsheets to figure out how their marketing was performing. "We said look, this is an interesting problem," Frederick explained. "We can automate this." They built funnel.io to automate marketing reporting and analysis, solving the problem that plagued e-commerce companies and online marketers who were drowning in manual data work.

They started with seed funding (about $3M in total across a couple of rounds) and launched in beta in 2015. But the real lesson came during the build: "We thought we would build the core product in one year. It took us really two years." The complexity came from an unexpected source—everyone's spreadsheet was different. More importantly, they discovered there were 340+ different advertising platforms their customers used. That meant 342+ different integrations to support.

The team realized this wasn't just a simple data-pull SaaS product. Customers needed help mapping data correctly, creating accurate P&Ls by combining cost data from advertising platforms with attribution data from services like Google Analytics, and managing multiple brands and markets. Funnel.io built a substantial onboarding team to work directly with customers post-sale, turning what could have been pure self-service software into a hybrid, high-touch solution.

They employed both inbound and outbound strategies, separating their legion (marketing) team from sales to create scalable processes. They invested in ads, content-driven inbound work, and targeted outreach. The economics worked out: customer acquisition cost was $6,000, and average revenue per customer was around $525/month (up from $400 a year prior). That translated to a payback period of roughly 10 months and a lifetime value of about $20,000, assuming customers stayed for three years.

What surprised Frederick most was the competitive landscape. Out of the 200 new companies they spoke to each month, only about 10 had already considered a competitor. The other 180 were choosing between continuing with spreadsheets or switching to funnel.io. By design, they had picked a space where customers faced a real unsolved problem.

The metric that proved they were on the right track: unit economics. With a CAC of $6,000, average revenue of $525/month, and LTV of $20,000, the math worked. Their churn numbers were exceptional for a B2B SaaS company—just 2.8% monthly logo churn, about 2% gross MRR churn, and 1% net MRR churn. For larger customers (the top half of their customer base), MRR churn actually turned negative at minus 1.5% per month, indicating expansion revenue.

By December 2016, they had $60K MRR. Twelve months later—November 2017—they had grown to $180K MRR, roughly tripling the business and growing 10-12% per month. They were processing over $1 billion in advertising spend annually through their platform, though they chose not to take a percentage of spend, instead sticking to a pure SaaS subscription model. Frederick believed mixing revenue models "muddies the waters," and customers didn't want to pay a percentage of spend anyway.

In August 2017, they raised a $10M Series A round, bringing total funding to $13M. The round valued the company at $20M pre-money and $30M post-money—a standard valuation for a company doing $2.2M ARR. They deployed the capital across development and commercial teams equally, scaling customer acquisition while maintaining CAC discipline. They had grown to 340+ customers and a team of 37 across offices in Stockholm and Boston.

Frederick's philosophy about fundraising was measured: don't negotiate a valuation so high that you can't grow into it. At 10x ARR on a $30M post-money valuation, they had room to deliver returns while maintaining healthy unit economics. His advice to his younger self—"get out of your comfort zone earlier"—had proven prescient. Leaving the security of bigger companies to build funnel.io was transformational.