Future Stars: Scratchpad

My SaaS pick of the week, future superstar companies at seed stage or below.

I heard about Scratchpad today while listening to David Sacks today on CNBC. His primary topic of discussion was about censoring Reddit users and how Discord shouldn’t have been allowed to silence the WSB organization.

Right before his segment ended, he snuck in a tidbit about an investment that he just closed on. That investment was a $13m Series A investment into Scratchpad.

Naturally, my ears perked up and I immediately wanted to know about the business given Sacks investment history. His angel investments include Facebook, Uber, SpaceX, Palantir Technologies, Airbnb and Houzz. Sacks was also the founding COO and product leader of PayPal and Founder/CEO of Yammer. In 2016, he led the turnaround of Zenefits as interim CEO. In 2017, Sacks co-founded Craft Ventures, an early-stage venture fund, and blockchain startup Harbor as an incubation of Craft Ventures. So now you can see how he has a strong sense for picking winners.

Another interesting observation is his time horizon of investments. Sacks is looking to put capital to work over the long term. He typically has a decade long hold period and is seeking those Uber/Facebook/Airbnb type stars.

That’s enough background on Sacks and certainly not all of his investments are winners, just like any investor there are break out investments and ones that lag. None the less, I think Scratchpad is building a very unique product and I can see why they’re accelerating at such a rapid growth rate.

Source: scratchpad.com

Background

Pouyan Salehi and Cyrus Karbassiyoon co-founded Scratchpad in 2019 after observing the challenges salespeople were experiencing in their day-to-day workflows. Account executives struggled with keeping Salesforce updated, managing their pipeline, and collaborating with their broader revenue team, especially during handoffs. Sales operations and managers also faced difficulties with enforcing process compliance with front line sales teams.

These challenges stem from revenue teams being forced into collaborating within docs, sheets, and apps that are all disconnected from the CRM system. As a result, sales reps succumb to using endless browser tabs and copying and pasting sales notes into slow-loading CRM systems, leading to incomplete or missing sales data. Furthermore, managers, sales operations teams, and enablement teams cannot enforce the process compliance necessary for sales teams to consistently meet their quotas.

Customers use Scratchpad as a web app or install it as a Chrome plug-in, with the entire setup process taking less than 30 seconds. Scratchpad instantly connects to Salesforce and gives sales reps a fast and modern interface to interact with their sales data and workflows. Salesforce remains as the database while the Scratchpad workspace combines sales notes, spreadsheets, tasks, Kanban boards, search, collaboration, and process workflows into a single intuitive interface.

Growth

Since inception, Scratchpad has amassed thousands of weekly active users who have made over two million Salesforce updates in the last 12 months. Scratchpad has an industry high Net Promoter Score (NPS) of 77. Top companies including Autodesk, Brex, Lacework, Segment, Sendoso, Snowflake, Talkdesk, Twilio, and Udemy rely on Scratchpad to improve workflow and sales outcomes.

Funding

Source: Crunchbase
  • $13m Series A led by Craft Ventures
  • $3.6m Seed Round led by Accel

Go Forward

Overall, we are going to want to target these KPI’s when further diving into Scratchpad.

  1. LTV/CAC (Target 4:1)
  2. MoM Growth (15%+)
  3. Margin Profile (targeting high margins here, 70%+)
  4. ARR Growth (90%+ at this stage, targeting 50%+ at growth stage)

Right now, Scratchpad should be experiencing ~100% ARR growth if not much more. With their recent $13m round they have the capital to further develop their product, but really focus on bringing in additional large enterprise clients.

I’m certainly looking forward to keeping track of Scratchpad in the future and will track any major funding progressions/news worth pieces.

Primarily Growth & Venture Content // Avid Art Collector and Newfound Traveler (All Thoughts are My Own)