In the world of monster fundraising rounds for early stage startups, an extra $750,000 may seem paltry. But for Jerry Jao and his team at Retention Science, that money signifies an important business connection.
The Santa Monica company announced Thursday that it received the investment from Forerunner Ventures. Added to the seed round that Baroda Ventures led for the company last year, the $750,000 brings Retention Science’s total funding to more than $2 million.
As part of the deal, Kirsten Green, founding partner at Forerunner Ventures, will join the Retention Science board. Green has made a name for herself in the e-commerce space through her firm’s investments in razor-of-the-month service Dollar Shave Club, beauty product startup Birchbox, glasses purveyor Warby Parker and men’s clothing retailer Bonobos.
Jao believes that Retention Science, which provides data analytics for e-commerce marketers, could make some valuable connections with Green on the board.
“Kirsten is probably one of the most respected investors in the digital commerce space,” he said. “I saw this as an opportunity to work with her portfolio companies. We’re super excited about the strategic value and relationships that Kirsten brings.”
Jao founded Retention Science with Andrew Waage and participated in MuckerLab’s first startup accelerator class last year.
He said the company has received about two dozen investment requests this year, but wasn’t necessarily seeking more money. The 14-person company is generating revenue and has signed customers such as Honest Co. and CafePress.
Those companies, along with a handful of large retailers Jao declined to name, use Retention Science’s analytics to develop strategies for retaining customers. For example, Retention Science’s tools help a retailer decide when to email customers with promotions and when to leave them alone.
Retention Science will use the cash infusion to start marketing its analytic tools and grow its team. The company has also redesigned its website and developed a new logo.
“You have to spend a lot of money upfront on marketing,” Jao said. “As an early stage startup, we wanted to spend money where it would actually move the needle so we’ve been stingy about marketing.”