Raising a Series A with $10M in the Bank: Dean Stoecker, CEO of Alteryx (Part 7)

Sramana: How much did you raise in your Series A?

Dean Stoecker: We accepted $6 million of investment.

Sramana: SAP is a corporate venture fund. Why did you select them over the others?

Dean Stoecker: The others were not corporate ventures and were not strategic for us. They were all firms with growth equity plays. The reality is that they did not understand the space we were in. They all loved the business model. We are a subscription model with a 96% renewal rate. We had 38% upselling rates, with a net churn of +19%. Any money person would love that model. The problem is that they did not understand the BI and analytics world.

SAP understood the BI and analytics world. They felt we would lead the disruption in that space, because people need exactly what we have: more capability with fewer tools and desktop to cloud publishing of analytics processes.

Sramana: As part of that strategic investment, did you gain access to SAP’s channel?

Dean Stoecker: No, we didn’t. We did not even try. I did not pick them because I felt we could leverage them or that they were a suitor. I picked them because they knew a lot of people, they understood our space, and they could potentially get us into other places. I chose the right partner for the right reasons.

I did hire George Mathew, who ran the business intelligence unit at SAP to be my COO. We are interested in them and we will want to do some connectors this year. The ventures group and the company are separate entities, but we do believe there is a channel opportunity there.

Sramana: When it comes to HANA [the SAP computing platform], they are actively soliciting others to build on top of their offering. HANA, in particular, is a big focus for them, and that is a potentially interesting channel.

Dean Stoecker: I agree with you. They would be a suitor for us at some point downstream. The funny thing is that SAP ventures, of all the portfolio companies they have invested in, have only sold three or four companies to SAP. Most of their companies have been sold to Oracle.

Sramana: I hear your point that SAP Ventures does indeed work separately from corporate SAP. I think most corporate venture firms try to avoid getting bogged down by exiting into themselves because there are a lot conflicting issues there.

Dean Stoecker: If entrepreneurs have opportunities with big players in a strategic role, my advice is to be careful. There can be a shiny ball and a lot of people will get let down. Take the right money for the right reason. If there’s a channel play, great.

Sramana: That is absolutely correct. A lot of people misread the signals. I think you have a very, very interesting company. It is very promising. Good luck as you go forward.

This segment is part 7 in the series : Raising a Series A with $10M in the Bank: Dean Stoecker, CEO of Alteryx
1 2 3 4 5 6 7