Why Matrix and Accel snapped up Zarget within two months of its founding

Image credit: Zarget.

Conversion rate optimization software maker Zarget today came out of beta mode and announced seed funding of US$1.5 million by Accel Partners and Matrix Partners. Two global VCs joining hands in a seed round of a fledgling startup is unusual enough. What’s more surprising is that the term sheets were signed way back in April of last year, within two months of Zarget’s inception, when it was only a prototype. Thereby hangs a tale.

But first, a quick look at what Zarget does. It enables website optimization through a simple Chrome plugin. A marketer or product manager can do everything from A/B testing and real-time heat maps to funnel analysis (which tracks a user from engagement to conversion) without having to load the website into separate apps. It happens on-site with the plugin, which is a first in the industry.

Zarget’s co-founder and CEO Arvind Parthiban uses an analogy to explain why this is path-breaking. “People have been listening to music for a very long time, but the devices for listening to it have evolved from the gramophone, tape recorder, and CD player to the iPod,” Arvind tells Tech in Asia. “In the same way, website optimization has been around for eight years. What we’ve done is to come up with a Chrome extension which opens up a world of opportunity and actually changes the way optimization is done.”

Discovered at SaaSx

Zarget co-founders Santhosh Kumar (left), Naveen Venkat, and Arvind Parthiban,

Before we dive deeper into the product, let’s hear the story of how it got discovered by Matrix and Accel. Arvind and his two co-founders, Naveen Venkat and Santhosh Kumar, were volunteering at SaaSx – an annual event in Chennai, India’s SaaS capital. Tech in Asia was there too.

Zarget was a fresh startup in stealth mode just two months into its journey. So Arvind was taken aback when Girish Mathrubootham, founder and CEO of leading customer service software maker Freshdesk, told him an investor from Matrix attending the event wanted to meet him. All three Zarget co-founders were former employees of productivity tools maker Zoho, a pioneer in cloud-based software from Chennai which has spawned a number of SaaS startups, including Freshdesk. An all-Zoho team – the rest of Zarget’s founding team of six were also from Zoho – that’s what caught the eye of Raghav Nagarajan of Matrix.

“Not now, maybe later,” Arvind told Girish, because he was reluctant to talk to investors before he even had a product. But then, Raghav pinged him directly, visited the Zarget office and worked out a deal. Girish roped in Accel and made an investment himself to round it off.

It set off a flurry of activity which caught the fledgling entrepreneurs off-balance. Five other term sheets arrived from big VCs when word got out that Matrix and Accel together were putting seed money into a brand new startup. Arvind finally managed to put temptations aside to go with the investors and mentors he could relate to.

Learning the software product business at Zoho

20 of Zarget’s 25-member team are former Zoho employees. Photo credit: Zarget.

Arvind has known Girish since their Zoho days. It was Girish who hired him when he was fresh out of engineering college a decade ago. He recalls telling Girish he had learned nothing in college. At that point, Zoho was at best a stopover to him until he found an opening abroad – so he could afford to be brash. It had an unintended effect on Girish, who had a laugh and gave him a job.

Thoughts of going abroad began to recede from Arvind’s mind as he started to learn about software product development. This was very different from college. He stayed on at Zoho and watched Girish leave to start Freshdesk. Arvind always knew he would also strike out on his own to become an entrepreneur when he was ready.

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