Business

Pendo buys British software firm, as the Raleigh startup keeps growing

Todd Olson is the CEO of Pendo, a Raleigh software company, which has raised more than $100 million since 2013. On Monday, the state awarded it an $11.7 million incentives package.
Todd Olson is the CEO of Pendo, a Raleigh software company, which has raised more than $100 million since 2013. On Monday, the state awarded it an $11.7 million incentives package. tlong@newsobserver.com@newsobser

Tech startup Pendo, which has grown significantly in Raleigh over the past five years, announced Tuesday that it bought a British software firm, an acquisition meant to round out its own software platform.

Pendo, which now employs about 225 people in downtown Raleigh, bought Sheffield, U.K.-based Receptive Software for an undisclosed price, the two companies said Tuesday.

Pendo’s cloud-based technology helps business customers improve their websites and products by providing behavioral analytics on what features their customers are using and which ones they’re ignoring. It also sends pop-up messages to software users notifying them of features they may not know about.

It’s all meant to let companies determine how to create websites and products that their users will actually use.

Pendo CEO Todd Olson said Receptive’s technology will let them add to the capabilities they already offer their customers. (The company originally heard of Receptive after asking its own customers what other platforms they were using.)

Specifically, Receptive’s technology will allow website and product users to supply feedback to companies and demand new features, something that isn’t available under Pendo’s software right now. For example, using Receptive’s technology, a company could present customers with the ability to vote on features they would like to see added to their website.

“It facilitates more two-way communication” between customers and businesses, Olson said in a phone interview.

“Customers just want to be listened to,” he added. “When a customer asks for feedback and the company doesn’t tell them anything, they often just go dark. This helps you avoid going dark.”

Pendo has been one of the most promising startups in Raleigh in recent years. The company has raised more than $100 million from investors and last year it received an incentive from the state of North Carolina to grow its headcount in Raleigh to nearly 600 people.

That infusion of money from investors and the state has accelerated the company’s growth, Olson said, including giving it the ability to buy up other firms. Receptive is the company’s second acquisition, after it bought a company based in Israel last year.

“You look at acquisitions from a couple lenses,” Olson said. “We are primarily acquiring to accelerate our road map. While we could build all these things ourselves, sometimes it is more efficient to go to market and acquire.”

Receptive will continue to keep its 10-person office in Sheffield, located a two-hour train ride north of Pendo’s London office, and will be integrated into the company over the next year.

Olson said adding the Receptive team will also give Pendo fresh perspectives to learn from going forward.

“When I met the founders of Receptive I was blown away,” Olson said. “They had a lot of chemistry, and I saw the opportunity to add not just the capability to our own product but also an amazing entrepreneurial team.

“You need to keep breathing life into the culture, and with new entrepreneurs, it injects some fresh perspective.”

Including Receptive’s Sheffield office, Pendo now has locations in Raleigh, San Francisco, London and Israel.

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Zachery Eanes is the Innovate Raleigh reporter for The News & Observer and The Herald-Sun. He covers technology, startups and main street businesses, biotechnology, and education issues related to those areas.
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