Mar 19, 2020 · 20m · top-founders
1699 UserTesting Grabs $100m Series D w/ $84m in Revenues While Rest Of World Virus Panics, How Will CEO Spend Money?
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this interview with Nathan Latka, UserTesting CEO Andy MacMillan discusses how the company scaled past $84 million in ARR and raised a $100 million Series D round by accelerating enterprise adoption, expanding product use cases beyond UX teams, and executing disciplined international M&A.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 39.4% of the talking time here. How this is scored →
Nathan as informed peer 5.3 Guest teaching 3.7 Guest disagreement 1.5 Nathan pushing back 2.7
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 13:59 Andy rejects Nathan's aggressive M&A roll-up scenario
Andy pushes back directly against Nathan's suggestion to buy small survey companies, explaining that building partner ecosystems creates far more enterprise value than acquiring balance sheet revenue.
Hardest push from Nathan ▶ 4:10 Nathan presses on wire timing before the market panicNathan refuses to just accept the $100M headline, immediately drilling into whether the cash was actually wired before the coronavirus market disruption hit.
Biggest teaching moment ▶ 9:11 Andy teaches SaaS organizational design for customer successAndy articulates why tying CS comp to expansion ruins customer trust, arguing that sales should own all growth and CS should strictly own satisfaction and gross retention.
Nathan holds their own ▶ 6:18 Nathan analyzes revenue acceleration benchmarksNathan demonstrates sharp SaaS financial expertise by calculating historical growth rates from past interviews and breaking down the difficulty of accelerating past $80M ARR.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Business Model, Customer Benchmarks, and $100M Funding | 6 | 2 | 1 | 3 | Nathan quickly runs through SaaS benchmark calculations, estimating conversion rates and pricing metrics. Andy announces their unreleased $100M funding round, and Nathan probes into the exact wire timing relative to the emerging pandemic. | |
| Accelerating Revenue Growth and Expanding Beyond UX Teams | 6 | 3 | 0 | 1 | Nathan breaks down UserTesting's revenue growth trajectory from prior interviews and compliments Andy on accelerating growth rate on a larger base. Andy explains how adoption expanded from UX researchers to entire product and marketing teams. | |
| Retention Metrics and Sales vs. Customer Success Alignment | 6 | 5 | 2 | 4 | Nathan digs into gross and net retention math. Andy delivers a strong organizational philosophy on why customer success should never have sales or upsell quotas. | |
| Disciplined M&A Philosophy and Partner Ecosystem Dynamics | 5 | 6 | 4 | 4 | Nathan suggests opportunistically rolling up smaller bootstrapped survey tools during the downturn. Andy counters the premise, explaining that UserTesting focuses on partner ecosystems with players like Qualtrics rather than financial engineering. | |
| Burn Rate Management, Pipeline Growth, and AI Technology | 5 | 4 | 2 | 3 | Nathan asks whether Andy will double burn rates up to $4M per month. Andy rejects the common venture playbook of blindly throwing sales reps at pipeline, detailing disciplined capacity planning and product AI investments. | |
| Quarterly Bookings, Crisis Impact, and Long-Term IPO Outlook | 4 | 2 | 0 | 1 | Andy outlines bookings momentum and a 24-36 month IPO horizon before moving into a lighthearted Famous Five segment, showing his garage green-screen setup. |
Statements from this episode (15)
UserTesting has about 3,500 customers on annual SaaS subscriptions
“For the past five years, it's been entirely a subscription-based SaaS platform. About 35,000 people have ever tried the product or used it as a pay-as-you-go model. We have about 3500 SaaS customers that are paying us on an annual subscription basis.”
UserTesting's top enterprise accounts spend over $1M annually
“We're doing you know, supporting massive research teams and design teams at some of the largest tech companies in the world that might be spending, you know, over a million dollars a year with us.”
UserTesting raised a $100M round from Insight Partners
“We just raised a hundred million dollars from insight partners and have yet to announce that publicly, but pretty excited to have raised that.”
UserTesting expects to cross $100M ARR by mid-2020
“So we're going to cross a hundred million in ARR probably mid this year growing about 40%.”
UserTesting is negotiating a single enterprise deal for over 10,000 seats
“I mean, we have a customer right now we're working with that's looking at doing, you know, over 10,000 seats with us because they want to see everyone in the company who builds or markets or designs the product, be able to have that direct interaction and see …”
UserTesting maintains an 86% gross revenue retention rate
“We're at about 86% right now retention, so call it 24 sorry, 14% gross churn.”
UserTesting's customer success team does no selling or upsells
“I have a chief customer officer who reports directly to me and they are solely responsible for making sure the customers are successful. They don't sell them anything. They don't upsell them anything.”
UserTesting Reaches 42 Edinburgh Staff and 10%+ International Revenue
“We're already at 42 people in Edinburgh, Scotland that's growing like crazy. Makes up more than 10% of our revenue now internationally.”
UserTesting is acquiring Norway-based testing platform Teston
“One of the announcements we'll be making by the time this is live is we're acquiring a company called Teston, which is based in Norway. Allows you to test in a couple of different languages that we don't yet support on our platform.”
SurveyMonkey and Qualtrics are go-to-market partners for UserTesting
“Some of the companies you mentioned like SurveyMonkey or Qualtrics, they're great partners of ours. We spend a lot of time going to market with them.”
UserTesting burned $1M to $2M monthly prior to its Series D
“Yeah, absolutely. And that's probably right somewhere in that window is probably right about where we were.”
UserTesting's sales pipeline grew 75% year-over-year in 2019
“We saw massive pipeline growth last year. Our pipeline was up 75% year over year.”
UserTesting acquired AI video processing startup Truth Lab
“We acquired a company six months ago called Truth Lab, which is about doing AI video processing.”
UserTesting passed $10M in net new bookings in Q4 2019
“Did that in in Q four, and we'll probably do that again in Q one.”
UserTesting is 24 to 36 months away from considering an IPO
“I love the idea of being a public company at some point, but I don't think it's in the near term for us having just raised that round. I would think you know, we've got. 24, 36 months or something before we'll get real serious about thinking about that.”