We have completed our first investment as Operator.vc in a company called Privy, where we were the lead investor in a small(ish) new round of financing (Privy official announcement). We are big believers in the company because the grit the team has displayed and their amazing metrics. We never planned on being a lead investor, but when you are operators who write checks (and aren’t VCs who have LPs to answer to) you can do whatever the f*ck you want and we’re happy to be unconventional if we believe in something.

Here is an overview of Privy and what we love about it:

PRODUCT

Privy provides tools to help companies get more email list signups from their website. Their product offers popups, bars, banners, landing pages, embedded forms and more. Through more than 25 integrations with email marketing systems and more than 10 integrations with website content management systems, Privy makes it easy to add their product to your website and automatically add new email list signups to your preferred email provider.

Privy Integrations

They have had a lot of interest from current customers to add a simple email drip campaign functionality, and they have built some of that functionality already, providing another way to increase revenue per customer and also increase the stickiness of the product.

TEAM

The founder, Ben Jabbawy, has a lot of startup experience and has personally proven to me over the 4+ years since he started Privy that he has tons of grit and perseverance, which is essential to make a startup successful. Ben is the only business person in the company, joined by a VP Engineering (Peter Cai) and 3 other developers. Peter most recently spent 3 years at Microsoft in engineering working on bringing Office to the cloud and is the co-inventor of a patent there as well. The team is very lean and mean with strong product / technical skills, which is exactly what you want in a startup.

GROWTH

Privy spends $0 on marketing or sales — Ben spends some time on marketing but the primary growth driver are their many product integrations and the virality of the free version of their app. They have built integrations with more than 35 website and email tools (and listings in those companies’ app stores), co-marketing campaigns they run with their integration partners, search engine optimization for relevant keywords, and having thousands of free users (which all have a “Powered by Privy” link on their popup and banner displays).

Privy is used by 53,000 websites in 180 countries which collectively attract over 200 million visitors per month. Each month typically thousands of new companies sign up for the free version of Privy. Their conversion from free user to paid user is around 4–5% and their month on month MRR growth is in the 10–15% range.

Privy Growth

Privy has proven their ability to grow with very low CAC in the extremely crowded SMB MarTech market. I see tons of companies in this market and most of them have major issues standing out from the noise and having a scalable go to market model. Privy’s model and metrics are outstanding and are the critical ingredient for success in this market.

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