We recently announced that we are partnering with Boston-based meQuilibrium to help further accelerate the company’s growth. Read more to learn why we invested and the reasons we are excited about meQuilibrium’s continued expansion.

A High Growth Company at the Intersection of HRtech & Healthtech

meQuilibrium is a leading digital solution for building employee resilience at scale. The clinically-validated platform is used by Fortune 500 companies to holistically address burnout, stress, and employee wellbeing by increasing resilience at both the individual and organizational level. The company has more than 500,000 members on the platform and has gathered over 60 million points of population data, enabling the use of machine learning to deliver personalized recommendations to increase employee engagement and drive HR strategy and business outcomes.

meQuilibrium has been measuring and improving employee mental health and emotional wellbeing, performance and overall resiliency since its founding in 2010. It has experienced steady growth that surged during the COVID-19 pandemic as employees struggled to adapt to an increasingly complex work environment and employers felt the urgent need to support their workforce. The demands of a constantly connected workplace have left employees exhausted, anxious, and burned out. These feelings have been further exacerbated by the burdens of uncertainty and turmoil that have resulted from the current pandemic. Today, 59% of workers worry about their mental wellbeing, specifically reporting concerns around stress and burnout. As a result, companies’ prioritization of and investment in employee wellbeing has drastically accelerated as they look to curb absenteeism, turnover, and decreased productivity.

Trust Built Over Time Enabled Remote Investment

HRtech, Healthtech and their intersection are areas of focus at Vistara Growth.  Our interest in the space and our relationship with the company was established well before the pandemic. Even then it was clear to both employers and investors that employee wellbeing solutions are must-have rather than nice-to-have offerings for successful companies.  By establishing a consistent level of interest and building trust over time, we were well positioned to work together when the time was right for meQuilibrium to add growth capital.  That trust also provided Vistara the confidence to complete a fully remote investment in a fully remote business. We are thrilled to work with CEO and Co-Founder Jan Bruce, COO/CFO Tom Brennan and the entire meQ team and group of tech and healthcare focused investors.    

Resilience: The Right Solution for Today’s Workplace

Depression and anxiety cost companies $1 trillion a year in productivity globally. Resilience, the ability to successfully navigate stressful or challenging situations, is a tangible skill that can be taught to improve mental wellbeing and help lower these costs. meQuilibrium’s platform is designed to help employees build resilience. Even once the current COVID-19 pandemic passes, we will continue to live in an environment of persistent disruption and constant change.

meQuilibrium has successfully helped companies thrive in times of uncertainty with its digital content-based asynchronous coaching platform that offers highly personalized upskilling to improve employee engagement, performance, and wellbeing, ultimately delivering tangible ROI. Specifically, meQuilibrium has found that resilient workforces are 60% less likely to experience burnout, 31% more engaged, and 50% less likely to experience stress-related productivity loss.

Differentiated by Proven Science

meQuilibrium leverages the science of resiliency, artificial intelligence, predictive analytics and biometrics to enable businesses to build higher performing teams. As we assessed meQuilibrium in the context of the broader employee wellness space, what stood out about the company’s offering compared to other vendors was its foundation in neuroscience principles and clinically-validated assessments to deliver tangible results. Specifically, the company’s offering builds upon 18 unique factors, ranging from emotional intelligence to sense of purpose, that train people how to better respond to instances of change or transformation.

Today, the company’s customer base is comprised of over 60 leading corporations, including global enterprises such as Ford Motor Company, Johnson & Johnson, Comcast NBC Universal, Marriott International, and Paychex, among others, as well as a growing number of health plans.

Breadth & Depth of Solution

In addition to its proprietary predictive models and unique data assets, the breadth of meQuilibrium’s offering is also attractive. The company offers a full enterprise suite, with the ability to create interactive, personalized recommendations and behavioral interventions at both the individual employee level as well as for the entire organization. Additionally, meQuilibrium’s robust analytics capabilities deliver executive-level insights and real-time dashboards that help organizations identify workforce trends and top challenges, as well as proactively predict risk before negative outcomes transpire. As a result, the company is able to help solve problems across the HR workflow, including those that touch benefits, talent, learning and development, as well as diversity and inclusion. Given these broad capabilities and with its platform available in 14 different languages, we believe that meQuilibrium is well positioned to meet the growing needs the largest global enterprises serious about employee resilience and wellbeing.

Poised for Expansion With Flexible Growth Capital

With our growth financing, meQuilibrium is well positioned to continue its product and market leadership for employee wellbeing solutions. The company is prepared to accelerate investment in its product roadmap, pursue acquisitions of complementary technologies, and has the budget for ambitious go-to-market initiatives including building out partner channels.

We worked closely with the meQuilibrium team to design a flexible financing solution to meet the company’s needs in support of such growth. This includes capital today as well as the optionality to access additional capital in the future at the company’s option without having to incur costs if that capital is not needed.

It has been a pleasure getting to know Jan Bruce, Tom Brennan and the rest of the meQuilibrium team. In addition to their expertise in building resilient and agile workforces, the depth in understanding best of breed and highly integrated HR technologies and overall people and organizational strategies is evident across the company.

As part of our diligence speaking with various meQuilibrium customers and partners, many highlighted the company’s superior technology and content, but also customer support, approach to partnership and access to company leadership as key differentiators. We are thrilled to support meQuilibrium as the leading digital solution for building employee resilience and look forward to partnering in support of the company’s continued growth and innovation.

Looking for Debt or Equity Funding?

We would be delighted to discuss our flexible and tailored growth capital solutions.

Last month we announced that we are leading a US$50 million Series C Funding to power growth at Kore.ai. Read on to learn more about our journey with Kore.ai to today.

First Impressions Pointed to Success 

We first encountered Kore.ai in early 2018 when we were introduced to its platform and vision. We enjoyed the conversation and came away very impressed with the pedigree of the company’s founder Raj Koneru, the value proposition of the Kore.ai platform, and the enterprise customers it had landed, especially at that stage of the company’s evolution. While from a scale perspective it was a little too early for Vistara to invest we agreed to stay in touch, noting several brand name potential customers in the near-term pipeline.

When we caught up with Raj and team again in late 2018, the business wasn’t yet at the scale where we typically get involved with companies. However, we did note that many of the potential customers such as Signify and AB InBev that had been in the pipeline when we first spoke had in fact signed up and were now using the platform. Yet again we came away impressed with the ability of the management team to execute and deliver on future expectations.

Kore.ai Tripled in Scale within 18 Months 

When we reconnected in mid 2019, the company had almost tripled in scale since we had first spoken with the team 18 months previously. As before, the management demonstrated the consistent ability to close household-name enterprise customers, like Airbus, that were previously mentioned in the pipeline. The company had finally reached the level of scale where Vistara could get involved as an investor.

Our Initial Investment 

We worked with the team at Kore.ai to agree on the terms of a convertible debt investment to retire some existing debt and add significant growth capital to the company balance sheet in late 2019. Our intention in using a convertible debt structure was to convert into an expected larger equity round that the company planned to raise over the following couple of years and become a long-term partner to Raj and the management team.

At this point it’s worth pausing to briefly explain the key factors that we considered (and liked) about the Kore.ai product, market, and team.

What We Liked About Kore.ai 

As machine learning has improved and driven better product offerings, the use of virtual assistants has not only become more accepted, but it is now recognized as significantly improving and optimizing the customer and employee experience. This realization has led to dramatic market growth. While many of the headlines around automation in call centres (where average employee tenure is usually around 6 months) often revolve around reduction in headcount, this is not how customers tend to think about it. One customer we spoke with pointed out that there are other huge benefits, for example using an AI-based virtual assistant to initially engage with customers significantly shortens wait times. It also improves agent retention rates by allowing them to focus on more complex issues, access information quickly and answer queries with pertinent answers.

Virtual assistants also allow companies to better identify customer and employee interactions that are best suited to being addressed by a human, which leads to a much improved and customized experience.

Key Technology Differentiation 

Kore.ai’s proprietary platform technology uses 3 orthogonal NLP engines to enable better understanding of user intent leading to highly relevant responses in multiple languages. It is this key technology differentiator along with its no-code platform that has helped Kore.ai to consistently succeed in landing large customers in RfP “bake-off” type processes, which start on a level playing field. The company’s success in many of these processes that are run by highly sophisticated enterprises is a powerful validation of the platform and functionality the team has built. Furthermore, Kore.ai’s platform approach, where its platform can act as the primary interface to multiple software tools and platforms for an infinite number of customers and employees, is key in reducing “bot sprawl” across enterprises that are acutely aware of limiting the growing proliferation of different software products. From an external validation perspective, Kore.ai’s technology has been identified by Gartner in their recent Conversational AI Platform Competitive Landscape report.

Customer Value 

Perhaps most importantly in our eyes, once the platform is in production, Kore.ai provides tremendous value to its customers. We have observed the number of bot interactions or “sessions” at large customers grow exponentially over time from when it is first introduced. The result is improved outcomes and experiences for customers and employees.

We’re also big fans of the pricing model used by Kore.ai, which ensures a very beneficial outcome and strong return on investment for their customers. For us at Vistara, providing much more value to your customers than you capture is something that we always love to see.

Finally, as a five-time founder-entrepreneur Raj has incredible experience and knowledge of building and growing enterprise software companies. In fact, many of the senior team at Kore.ai have come from Raj’s prior companies to form a tight-knit management group. We have developed a great relationship with this team and have observed them execute consistently over time. We believe that the feeling is mutual as Raj’s quote below bears out.

“As a 5-time founder entrepreneur, I have worked with numerous investors at various stages. Vistara has been especially impressive in their involvement with Kore.ai, initially as a lender and now as an equity partner.  It’s critical for founders to partner with investors that have had experience not only in good times, but ones that can deal with bumps in the road and help make important decisions in the best interests of the company. I look forward to a continued long-term highly productive relationship with the team at Vistara as we execute on our ambitious growth objectives.”

– Raj Koneru, Founder and CEO of Kore.ai

Our Latest Funding 

To continue to capitalize on the growth opportunity Kore.ai completed a Series C equity raise with participation from PNC Investments as a strategic investor among the others mentioned. The participation of such a well-regarded strategic investor provides further validation of the technology and the management team. As part of leading this Series C raise, not only did we convert all of our existing convertible debt into equity and take positions on the board, but we also participated further in the round from our most recent fund and actually invested more capital. It has been a long journey from our initial conversation almost 3 years ago with what was then a small company. Having started as a growth debt provider to now being a meaningful equity shareholder in the company we are excited for the next leg!

Interested in Growth Funding?

If you’re interested in growth funding for your mid-stage technology company, talk to us!  We would be delighted to discuss our flexible growth capital solutions.

In April, we announced that we’re supporting Austin-based Vyopta with US$8 million in growth funding. Read on to learn more about why we invested and why we’re confident in Vyopta’s continued expansion. 

The Market Need: Scaling and Managing Collaboration Has Never Been More Critical

Vyopta optimizes performance and visibility across technology, workspaces, and people as they collaborate. Their platform aggregates data from multiple data sources and disparate unified communication vendors, such as Microsoft, Zoom, Cisco, and Google among others, into a centralized view that allows companies to proactively identify any systematic issues and reduce troubleshooting time to resolve any disruptions.

Vyopta was experiencing steady growth prior to the pandemic: companies were already entrenched in an era of digital transformation, adopting enterprise communication and collaboration technologies to stay competitive and help manage increasingly global customers, partners, and workforces. But this trend dramatically accelerated the adoption of cloud-based enterprise communication and collaboration technologies as the spread of COVID-19 halted travel and companies scrambled to enable office workers to work remotely.

As a result, the demand for collaboration technologies skyrocketed across businesses and industries, including those such as healthcare and education, as organizations looked to stay connected and productive despite being remote.

Pandemic Accelerated Growth, But Remote Environments are Here to Stay

As companies start to explore what a return to the office looks like, there are indications that many will continue to support flexible and remote work environments over the long-term. As a result, organizations must now be equipped to manage highly complex environments that are comprised of multi-vendor technologies, numerous device types, and disparate network environments.

Many enterprises face the challenge of finding an efficient monitoring solution for their increasing complex unified communications (UC) environment. For example, many equipment manufacturers offer limited monitoring specific only to their own applications, while third party monitoring tools fail to offer real-time troubleshooting capabilities or detailed reporting.  Vyopta’s “single-pane-of-glass” approach to collaboration performance monitoring enables IT teams to easily monitor and actively manage their entire UC stack from one place.

We evaluated Vyopta in the context of these overall trends and specific customer pain points, and believe that the company is uniquely positioned to provide organizations with the much- needed visibility and monitoring capabilities to efficiently manage their multifaceted on-premise, cloud, and hybrid environments that will continue to persist.

Validation from Customers and Strategic Partners

The value of Vyopta’s technology has been validated by hundreds of organizations globally that rely on Vyopta for comprehensive monitoring and analytics of key connections among their teams, customers, and strategic partners. Additionally, our conversations with customers confirmed how the platform helps proactively identify risks, detects problematic meetings and calls in real time, and enables a better understanding of overall UC utilization and ROI on technology investments.

While some vendors and equipment manufacturers include monitoring capabilities as part of their offerings, customers recognize that these tools are only so powerful and are unequipped to provide a much needed 360° view across collaboration environments. Therefore, enterprises turn to Vyopta given the company’s unique ability to unify data from multiple collaboration technologies into one, accurate set of actionable data. As a result, companies can more efficiently monitor and manage their growing number of applications, ultimately improving their overall end-user experience.

Vyopta’s Impressive Leadership Team

It has been a pleasure getting to know Founder-CEO Alfredo Ramirez and the rest of the company’s management team. It is clear there is deep technical knowledge and a passion for solving the evolving collaboration challenges faced by enterprise IT teams. The team’s expertise in collaboration environments was recently exemplified as Vyopta rapidly developed additional coverage of UC video, voice, and messaging applications that were quickly adopted by companies to support remote work during the current pandemic. For example, Vyopta was the first UC monitoring and analytics provider to support Google Meet and was also among the first to offer monitoring and analytics for Microsoft Teams.

How Vistara Helped: Reliable Growth Financing that Maximizes Flexibility

With our US$8M growth financing, Vyopta will be able to accelerate their product roadmap to satisfy increasingly complex customer requirements and meet growing overall market demand. We collaborated with the company to create a flexible financing solution that provides growth capital today, with optional access to additional amounts as Vyopta continues to scale. As a result, Vyopta can depend on reliable access to additional capital as needed, without incurring costs if that capital is ultimately not deployed.

We are delighted to partner with Vyopta as a leading innovator of monitoring and analytics for collaboration and communication technologies as they continue to help organizations better connect, serve, and innovate.

Interested in Growth Funding?

If you’re interested in growth funding for your mid-stage technology company, talk to us!  We would be delighted to discuss our flexible growth capital solutions.

Observability is critically important across a company’s entire IT architecture. For any business, understanding exactly how every part of their IT architecture is performing and where they can optimize and improve is crucial to being able to provide the level of service expected by both internal and external customers of the products and applications of modern enterprises. This applies whether they are using cloud, on-premise, or have taken a hybrid approach to hosting their infrastructure and applications. 

Over the last decade, as businesses came to understand this, the adoption of Infrastructure Monitoring was quickly followed by Application Performance Monitoring (APM). Providers of solutions for both infrastructure and application monitoring such as Datadog and New Relic have seen great success and have made the transition from private to public companies as customers realized that observability leading to the metrics and insights that were surfaced by these solutions were essential to their ability to provide great products and experiences to their own customers.

In addition to infrastructure and applications, a company’s own IT network is an equally important component of their overall architecture, and in some cases (such as internet service providers and some gaming companies) the network itself is the product. Until recently, the same level of attention was not necessarily paid to networks despite their vital nature, and with COVID-related traffic spikes, they have become even more critical, as this Atlantic article describes. The analytics and insights derived from Kentik‘s network observability platform now enables companies to have the same level of visibility and analytics-driven insight across their networks as they have come to expect from other parts of their IT architecture. We at Vistara believe that the Kentik platform is an extremely valuable solution that addresses a very obvious need for many modern businesses in capturing and maximizing the value of their network data to improve and optimize the uptime, speed, efficiency, security, and cost of their IT networks.

The Team

Since first encountering Kentik’s CEO Avi Freedman, we have been ceaselessly impressed by his capability, vision, and the incredible depth of his domain expertise. To describe someone as a polymath is not a compliment to be paid lightly, but it’s certainly true in this case. In addition to all of this. Avi is a very pragmatic and personable guy who we found easy to work with from day one. A further testament to the regard in which Avi is held is the quality of the team that has come together at Kentik, a team that continues to execute on the vision. The Kentik team has made the complex simple and continue to innovate and show the value of their solution to the expanding range of Kentik subscribers.

The Product

As we learned about the business, we were provided a demonstration of the Kentik platform. On being shown the entire global network of an anonymized (but real!) global technology company presented alongside key performance metrics as a single screen graphic, we had a collective “wow” moment. That such a complex and dynamic network was presented with such intuitive elegance, even when presented to us as non-network engineers, made it really clear to us that this was a very powerful piece of technology.

The Customers

Kentik has awesome customers. Their customer base is comprised of the “who’s who” of the most sophisticated and advanced technology companies in the world, including several internet service providers, gaming companies, content delivery networks and household name brand software companies.

That such an educated cohort of customers would see the benefit of using Kentik really validated the value proposition of the product in our eyes, and our customer conversations along with strong metrics like growth rate, gross/net retention, and lifetime value certainly bore this out. A case study by Zoom explains how Kentik enhances their network visibility and performance to ensure they can continue to provide the level of service to customers that has brought them so much success. 

How We Helped

Our investment in Kentik was comprised of a combination of both debt and equity, which has several benefits:

First, our investment boosts the company’s cash balance and our long-term, fully non-amortizing debt is actually available to invest in growth rather than having to start to plan to pay it back early in the term. Our recent blog post explains in more detail why we don’t believe that amortizing term debt makes sense for growing tech companies.

Second, while still having the desired capital in the bank through our creative hybrid debt/equity solution, Avi, other founders and early employees were able to avoid additional meaningful dilution to own more of the company they have built and grown than if they had taken the equity-only route.

Third, from a shareholder’s perspective, as a fellow equity investor, Vistara is fully aligned with growing the business, rather than taking a very credit-oriented, downside-focused, “how will we be repaid” approach.

A TechCrunch article outlines in greater length Avi’s perspective on how our solution resonated.

We believe that Kentik has significant growth ahead of it and we are excited to participate in it as an owner of the business alongside the founders, employees, and its other angel and VC investors. We can’t wait to see how Kentik’s journey evolves over the coming years and we appreciate the opportunity to be part of it.

This post was written by John O’Donoghue, Director, Investments at Vistara Capital Partners.

Long gone are the days in which companies interact with customers through a single touchpoint. The rise of omnichannel commerce has created a need for companies to deliver a curated and cohesive experience across numerous touchpoints in the customer journey. Furthermore, the rapid proliferation of new channels, applications, and devices has fueled a highly competitive environment in which companies must strategically vie for customer attention and share of wallet. The most successful companies understand that regardless of what they are selling, they are in the “customer experience” business. This has resulted in a need for companies to drive greater engagement and seek more detailed insights from their customers beyond what traditional market research and one-directional surveys can offer. Therefore, companies have begun turning to technology solutions to equip them with the data and insights to proactively manage the customer experience in order to build loyalty, grow purchases, and increase retention.

The current environment has undoubtedly served as a catalyst for meaningful changes in consumer spending, preferences, and expectations. As a result, customer experience management (CXM) has been catapulted to the forefront of priorities for many companies. And while the last two quarters have brought heightened attention to adapting and elevating the customer experience among companies looking to maintain their topline during times of uncertainty, we believe that delivering a strong customer experience will remain a top priority even once the pandemic passes. Specifically, as product commoditization trends continue, we expect that the way in which companies both win and retain customers will be increasingly based on providing innovative customer journeys. This sentiment has also been shared by industry analysts covering the CXM space, such as Gartner and Forrester, who have long pointed to customer experience as a revenue generating opportunity, as opposed to a cost center.

Having served as an operator for over ten years in both the B2C and B2B businesses in the healthcare and food tech spaces, two industries in which the end-to-end customer experience is paramount, I gained an acute understanding that companies are undergoing a fundamental shift in which they are no longer competing for customers solely on product differentiation. Technology has created an empowered customer base that has come to broadly expect personalization, convenience, and immediacy across their consumption of goods and services. As a result, we have firmly entered into an era in which how a company delivers its product has become just as important as what it delivers. We believe we will see this trend accelerate with customer experience becoming the primary battleground where companies will compete for revenue.

With an appreciation of the importance and growing relevancy of the CXM space, we assessed Vision Critical in the context of their core mission to allow companies to collect meaningful and actionable insights needed to create relevant customer experiences, particularly as consumer preferences continue to evolve. Founded in 2000, the Company is best known for its market leadership in customer insight communities, an effective channel for companies to uncover deep, robust feedback from a subset of its most engaged customers. Differing from other CXM vendors such as Medallia or Qualtrics that focus on enabling the collection of broad feedback from a wide audience, Vision Critical allows companies to develop rich consumer profiles and detailed customer segmentation. Today over 750 brands use the deep customer insights captured on the platform to help inform optimal business decisions related to items such as product designs, pricing, product launches, and marketing campaigns.

To successfully deliver relevant consumer experiences in today’s competitive and rapidly changing environment, companies need a holistic and real-time understanding of their customer base. This requires regularly connecting with a range of customers, across multiple channels, using different mediums. Deep insights are needed to uncover customer preferences beyond simple demographic data and quick feedback is required to augment this data and ensure its relevancy. Vision Critical understands this and under its new seasoned management team, the Company has started to execute against an aggressive growth strategy and bold product roadmap to innovate beyond insight communities and become a market leader in the broader CXM space. CXM providers who are able to offer companies the ability to connect meaningfully with its most engaged customers as well as broader audiences will allow organizations to keep an accurate pulse on consumer preferences and successfully adapt customer journeys accordingly.

We believe Vision Critical is uniquely positioned to do just this. To complement its strong foundation in insight communities that help companies to discover deep customer attributes like motivation, preference, and beliefs, Vision Critical has started to develop new ways for companies to also collect broader feedback from customers who are not part of their insight communities as well as from non-customers. For example, the newly released Touchpoint and NPS Accelerator products allow companies to craft brief interactions to gather quick feedback from a much wider set of customers and external market segments, and to access these individuals through new digital channels. By developing a platform in which companies can collect both deep customer insights along with real-time broad feedback, Vision Critical is creating the capabilities for companies to holistically manage, monitor, and optimize customer experiences across different teams, lines of business, and consumer segments.

Beyond just customers, we are also seeing companies look to proactively engage a broader range of stakeholders that impact the customer journey, including their own employees. As part of their Summer 2020 Product Release, Vision Critical recently announced the launch of their Voice of Employee solution that is designed to elevate the employee experience by allowing companies to collect real-time feedback from their staff. By utilizing these insights, companies are able to more effectively attract, engage, and retain employees, who ultimately serve as the most valuable conduit to their customers and the core driver of the overall customer experience.

With our recent US$20 million growth financing, we are delighted to partner with Vision Critical on this next chapter in becoming a leading player in the broader CXM industry. It has been a pleasure getting to know CEO Ross Wainwright and the rest of the Company’s management team, comprised of veteran software executives with a strong track record of scaling enterprise businesses. It is clear that Vision Critical has built an exceptional team that has a customer-centric approach embedded deeply in its DNA. We look forward to the Company leveraging its strong foundation in insight communities to build a powerful and dynamic CXM platform that will enable companies to effectively connect with a broader range of their customers and create standout customer experiences both today and over the long-term.

This post was written by Kathleen Kaulins, Director, Investments at Vistara Capital Partners and a Board Observer on Vision Critical.