Scaling up SaaS in the Valley - Allo (BeeCanvas)
BeeCanvas develops and operates Allo, a SaaS collaboration product for remote education and remote work. The company recently raised a new round of funding from Korean VC investors Atinum Investment, Partners Investment, and Smilegate Investment, as well strategic investor Zoom, with Ascendo Ventures following on from its previous investment. In addition to its widely reported investment from Zoom, the company is genuinely special in many ways.
Allo Secures $5M in Pre Series A Funding
BeeCanvas’ co-founders are college dropout founders, which is extremely rare in Korea. It was one of a few startups that began as a Korean corporation and later flipped to American incorporation, although this is becoming a bit more common now. The most notable aspect, however, is that it is only one of a few Korean startups vying to be completely and purely a software company in the SaaS field.
In each area of traditional software fields, the best product typically tends to be the clear “winner” with respect to users preference and market share. Unlike AI or deep-learning companies that can leverage client partners for large-scale data through sales capacity, or e-commerce companies offering discount coupons and sourcing exclusive products through sellers, SaaS tools have less opportunity to boost their growth other than through the actual quality and utility of the product itself.
Moreover, users particularly have low patience and tolerance for bad products which directly leads to higher churn rates, and once users leave, they rarely come back. On the contrary, high quality products have very high user retention, and once users start using such products, it is difficult to stop or switch to alternatives. In this sense, BeeCanvas’ obsession and tenacity to build the best quality product is a unique and necessary trait to have in such an unforgiving field.
When we first invested in BeeCanvas in 2019, the company had a small base of users and had still not entered the global market. BeeCanvas’ determination to build the best possible product was evident, however, as the fruits of their labor showed through a solid, improving product that led to early traction and a small but high retention core user (fan)base that was so passionate that they even wrote blogs or published books on how to use it best.
In the three years since our initial investment in BeeCanvas (now rebranded as Allo), the company has numerous achievements including its safe landing in Silicon Valley via participation in the Alchemist Accelerator, significant growth in its MAU from a global user base, and successful incorporation as a US company.
On a quick side note, however, there are more disadvantages than advantages when a Korean company flips to another country. Above all reasons however, rather than it being the hurdles or adversities of another ecosystem, Korea’s startup ecosystem has simply grown to the extent that it is competitive with the top ecosystems of the world today. Korean tech companies are world-class in the content, lifestyle, consumer sectors, and even in deep tech fields like artificial intelligence, and there is widespread participation in the ecosystem by 1st generation tech entrepreneurs, institutional investors, government, accelerators, and big tech companies.
That being said, just as those that want to do KPop go to Korea, and those that want to play soccer go to Europe, if one wants to be a global winner in SaaS, the place to be is Silicon Valley. There is a vast group of small and large companies willing to experiment with new software, a deep mentor pool that can advise and help connect the dots, and an ecosystem full of top product managers with growth-hacking experience from global-facing giants like Google, Facebook and other unicorns. On top of this, it is the richest ecosystem for investors who live, breathe, and support SaaS businesses from business model development and monetization tactics to investor networking and listing on the NASDAQ.
BeeCanvas’ path has been long and hard, but despite startup cliché, their grit, tenacity, and relentless focus on building the best possible product has carried them from humble roots as college dropout founders in Seoul to a global facing SaaS startup based in the the Bay Area. Raymond, Jake and Edward, we salute you as you fight the good fight in SaaS in the mecca of startups and venture capital.
