How Braze CEO Bill Magnuson grew Braze to $593.4M revenue and 2.3K customers in 2024.

hello everybody my guest today is bill magnuson he's the ceo and co-founder of braves formerly app boy bill's humanizing connections between brands and customers at a global scale by streamlining customers past present and future data in an interactive feedback loop braze allows brands to take immediate actions on insights creating personalized messaging experiences bill are you ready to take us to the top absolutely all right so so tell us about the company what's company do and is it a pure place sas company yeah so uh braze is sas company you know we sell technology we sell the platform um at our core what we're trying to do is help uh people form better relationships with their customers through a customer engagement platform um we've really built braze to be the backbone of customer engagement for people as they're looking to you know run more sophisticated strategies better engage their customers for more valuable relationships with them interesting and and walk me through uh on average kind of a customer are they gonna pay you you know 100 bucks a month a grand a month a million a month what general space are you playing in so we work with uh you know generally large-scale consumer companies uh and so you know average annual contract values are in six figures okay got it's called 100 grand or north yeah okay very good and walk me through you know kind of put this on a timeline for me when did you launch the company so we were founded in mid-2011 uh so we've been at it here for a little bit over or coming up on seven and a half years uh and you know when we first started you know i think that we saw this fantastic opportunity in the market where we really fundamentally believed that uh the advent of you know mobile as a technology platform as a way for brands to communicate with customers as a way um to deliver products and services or supplement um you know real real world products and services would really kind of transform the economy across every vertical um and transform that relationship between brands and customers and so when we started what we wanted to do was bring technology to play in that you know particularly hard problem and create an opportunity for brands to reach out with engage and engage customers in a way they couldn't before and have you been able to kind of grow and scale those bootstrapped or did you kind of give in and say okay we're gonna raise some capital here uh we raised uh venture capital from the onset and you know over uh over time we've kind of tried to you know responsibly match our own growth rate to the transformation that we were seeing in the industry uh you know i think that the first six years of the company uh if you look at the financing history we raised about 40 million dollars and now uh in the last about year and a half we've actually added another 130 to that um so obviously uh quite an inflection point recently and we think that that you know is largely matching the opportunity that we're seeing in the market got it so 170 into date i yeah roughly did you did you choose to do most of that um on equity or is a bunch of that kind of debt on the back of a big round uh that's all equity it's all equity financing okay interesting yeah we've we've used venture debt a couple times along the way uh but you know presently sitting without debt and you know generally preferring equity financing tell me quickly when was the moment you said okay now is the right moment to use some venture debt here uh you know we've never really had to tap it necessarily for operations or anything like that but just to give us some breathing room you know as we were growing make sure that we weren't uh under the gun for financing timing so that we could just stay focused on the business fundamentals and not worry about the financing as much yeah makes sense 2011 is launched six years in obviously growth there it sounds like you're growing even faster over the past 12 months what have you scaled to today in terms of total customers using you uh so we're coming up on about 600 customers uh today and you know we've been we'll end the year uh close to around 300 employees as well uh and you know with that customer base is across a lot of different verticals uh we kind of broadly break out you know our client base into what we call digital first uh and then you know enterprise uh but broken out across a lot of different regions you know one of the things i think that was really interesting uh especially as we kind of had our provenance with a lot of mobile digital first companies if you go back to you know 2013 2014 and some of our early clients there that uh they were a lot more global uh than you know a lot of other businesses were your early customers yeah i think more global than even our investors expected uh you know and i think a big part of that was just that the app store and phones and you know the distribution platforms were very global and with digital goods and such and as well as a lot of the new ways for businesses to scale uh they were increasingly you know being started in places all over the world uh and scaling all over the world so we've been kind of global from the very early innings uh but now uh you know very much have a broad global client base talk to me about kind of economics around the sas space are obviously critical really to churn cacarp but pay back these kinds of things help me understand churn and how you measure it at your scale and what it is today and how you keep it low yeah i mean i think that you know looking at uh cost so obviously we're measuring customer churn on kind of a net dollar basis as well as um from a brand base or from a you know local basis and uh you know it's it's changed over time as well uh especially as you know we've ascended into working with enterprise companies and as digital first companies and such have also grown uh in their own size uh and stability uh in the early days you know there was uh you know we worked with a lot of mobile startups you know a lot of which didn't survive and what have you and so um as we've matured as a business you know we've seen uh our turn you know declining year over year for the last few years uh you know partially due to uh improvements that we've made in terms of how we integrate onboard and support customers as well as just changes in our client mix and you know a lot of other kind of business changes so when you leave expansion out for now i'm sure you have a healthy engine there but if you leave that out for a second and look at just gross revenue churn over the past 12 months i mean are we talking like five ten percent where where do you fall there yeah something like that uh you know and it depends on the category uh obviously the kind of more traditional enterprise fortune 500 are going to be on the lower end of that and then when we're looking at you know mid-market uh digital first companies and other regions that's going to be a little bit on the higher range yep i've noticed once companies that are at your scale uh that have your price points you know typically have very healthy expansion machines when a customer or a group signs up for you in year one i'm gonna make this up let's say i sign up for a hundred grand uh what a tip what do you typically expand that same kind of contract to in year two yeah i mean it it kind of depends because we have a few different archetypes of how we get started with customer so um you know sometimes we'll start on a particular product or a particular set of channels uh you know where we really work across a lot of different mediums and across a lot of different messaging channels so we're going to work with a client with their mobile user base as well as their web user base maybe uh their you know people using digital set-top boxes if it's uh you know a media client things like apple tv or what have you and then messaging going out across uh earned chat or you know own channels on those first party platforms like delivering messaging to the web or web push uh maybe mobile push maybe email and so some clients you know when we first start working with people they're going through a digital transfer information and we uh take over all of the client communication for them kind of right out of the gate and so when we see growth in those clients it's usually because their customer base is growing or they're adding new products or we're expanding within the corporate umbrella uh in other cases you know we've had clients that have grown 10 20 x uh because we started out working with them on just one channel and then you know over time we've kind of taken over all the customer communication that's great well so let's let's just look at a macro level then when you look at net revenue retention annually across your entire cohort of customers i assume you're north of 100 how far north i'd say best in class is like we've had some people on at 140-ish i mean where are you generally yeah i mean we're a little bit lower than that uh but again it's kind of a bimodal distribution right there's some people that are you know huge multiples and then others we just grow as their user base grows yep no that makes sense um the reason i like to ask that question is i always like to understand how much of your growth year over year is coming from expansion on your cohorts versus brand new customers um what would you how would you answer that yeah i mean...