Modernizing the Way Business Happens Locally: Why We’re Excited About Podium
Earlier this month, Podium announced it closed a $125 million Series C funding round, and Sapphire Ventures is excited to have participated. The way we see it, Podium’s customer interaction software is unique because it’s transforming how local businesses interact with their customers. Fast Company agrees, listing it as one of the World’s Most Innovative Companies for 2019.
While these are difficult times for local businesses, Podium’s platform is making it easier for them to stay in business by improving how they engage with their customers throughout the lifecycle--from product or service discovery to purchase and loyalty. More than ever, we believe that local businesses need new and creative digital channels to better communicate with their customers.
Podium’s platform enables local and small businesses to manage customer interactions across multiple channels such as webchat and text message. They can also manage reviews and feedback, and even accept payments. In addition, Podium provides employees with teamchat, enabling them to manage conversations internally and receive analytics on the engagement of their customers.
Why We’re Committed to Podium’s Vision
We believe in Podium and are committed to the company long-term. Here’s why:
The Technology Opportunity:
According to the U.S. Small Business Administration, there were 30.7 million small businesses in the country in 2019, accounting for 99.7% of all companies. We believe that despite the economic weight they carry, small businesses, and especially local businesses, have been historically overlooked. They have been slow to adopt technologies that will help them engage with today’s consumers on the channels and in the moments that they prefer. Think of it this way, a consumer can go on Amazon, make a purchase with a single click and receive a package the same day. Customer service is simple and in most cases self-serve. Contrast that experience with servicing a car or finding a home service professional. They’re dramatically different experiences when they don’t need to be.
Shifting Consumer Behavior:
How consumers shop has changed over the last several decades. One of the biggest disruptions we’ve seen is online reviews. According to Spiegel Research Center, nearly 95 percent of shoppers read online reviews before making a purchase. Consulting online reviews is how consumers start their discovery process and how they choose what to buy. And increasingly that goes for any sort of purchase people make. People turn to online reviews for everything from finding a healthcare professional to selecting a car repair center to a B2B product. By using Podium, businesses can keep track of their online reviews, chat directly with customers and handle payments right within Podium.
Strong Leadership Team:
When we look at companies, one of things that motivates us most are the people. Podium’s CEO Eric Rea has a fantastic personality--it’s a great blend of being optimistic and aspirational, yet practical and disciplined. This permeates across his executive team and the company culture. We’ve known Eric for years, and know that he understands the needs of local businesses. His father owned one, so the story is personal to him and we can see his passion for the work he is doing. It’s incredibly contagious!
CEO Eric Rea on Starting Podium, Teaming Up with Sapphire and Helping Small Businesses in a Time of Crisis
Leading up to the funding announcement, Eric and I spoke a lot about Podium, including why he decided to start the business, what he hopes to accomplish, why he’s excited about partnering with Sapphire Ventures and what his team is doing to help local businesses during the pandemic. Here’s what he had to say:
Why did you start Podium?
We started Podium to modernize the way business happens locally. The inspiration came from my dad’s tire shop. Despite being a successful business that provides an awesome in-person experience, the tire shop lacked the messaging tools needed to survive in a modern economy. Innovation for the last decade has largely been focused on building the online economy instead of local businesses like my dad’s.
Up until recently, the main ways my dad communicated with his customers were a landline phone and mailers. These legacy solutions were inefficient as society has shifted towards online discovery and messaging. Podium’s tools use messaging to help small businesses convert website traffic, schedule appointments, provide customer support, take payment, receive feedback, reviews and more--all by using the messaging platforms that customers are already using.
What’s driving demand for your platform?
Consumer expectations around how they interact with family, friends and businesses have forever changed. In the last five years since Podium was started, it has become progressively easier to show every local business the need to add messaging products to their toolbox. The way we see it, it’s clear that messaging is the future of customer interaction--no matter who you’re interacting with.
Since the COVID-19 crisis, messaging has quickly become one of the only ways small and local businesses can do business. This giant shift is most likely going to permanently alter the way that people make buying decisions, and will only increase the need for local businesses to run their business using Podium.
Why did you decide to partner with Sapphire?
When you are seeing the type of growth that Podium has had over the past five years, it’s common to hear proposals from investors about how they have a comprehensive, value-add approach to investing. The real task is to separate out those who are just saying that from the ones who actually walk the walk. Sapphire has proven over time that they deliver.
And Rajeev brings deep SaaS knowledge and valuable insight into our business model. Podium has been incredibly blessed with partners who have been able to level up our business. I see Rajeev as being one of those people. Overall, we’re thrilled to have Sapphire join our growth story as we work to become a world changing company.
What’s your goal with this latest round of funding?
We believe that any business that interacts with customers through a physical location will benefit from Podium’s messaging tools. Podium is working with 45,000+ small businesses today, and there are still millions out there that could improve how they interact with their customers. With the latest funding round, we plan on scaling Podium to meet the demand of this market size, which we’re looking forward to doing!
How are you helping local businesses in need right now?
Since the pandemic began, local businesses were one of the greatest hit sectors. Many of them have been operating for decades. And almost overnight, they all had to completely adapt their operations in order to be safe and remain open.
Podium recognizes the critical need that messaging and contactless payments provide in this environment. That’s why we immediately created Podium Starter, a no-cost version of Podium that gives US-based local businesses with two or fewer locations the basic tools they need to get started in messaging. Local businesses will now easily be able to convert the surge in website traffic into transactions using webchat, take contactless payments and use messenger to coordinate curbside pickup, arrange delivery options or any other customer service related conversation.
Disclaimer: Nothing presented within this article is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures. Information provided reflects Sapphire Ventures’ views as of a time, whereby such views are subject to change at any point and Sapphire Ventures shall not be obligated to provide notice of any change.Companies mentioned in this article are a representative sample of portfolio companies in which Sapphire Ventures has invested in which the author