Creating a Customer Success Powerhouse: The Merger of Totango and Catalyst

That’s where customer success software comes into play. Two customer success companies, Totango and Catalyst, on Wednesday announced they are merging in an effort to take on the market leader, Gainsight. “Everyone feels very excited about the potential of these two companies,” Catalyst CEO and co-founder Edward Chiu told TechCrunch. “The deep customer success expertise and enterprise capabilities of Totango combined with the intuitive design and forward-thinking vision of Catalyst create a powerhouse to redefine customer success and how businesses maximize customer lifetime value.”Jessica Lin, co-founder and general partner at Work-Bench, whose firm invested in Catalyst early on, sees a similar opportunity. “Our goal is for this combined entity to own the customer success market and have an even bigger outcome than Gainsight (which exited in late 2020 for $1.1 billion).

Customer Success Software Merges to Take on Market Leader

In the world of B2B companies, the focus often seems to be on acquiring new customers and collecting their information through a CRM or customer data platform. But what about the existing customers? Are companies putting enough emphasis on keeping them happy and continuing to sell to them? Enter customer success software.

On Wednesday, two companies in this space, Totango and Catalyst, announced their merger in a strategic move to challenge the market leader, Gainsight. However, what makes this deal unique is that no money is changing hands. Instead, the goal is to combine the strengths of each company and build a stronger entity together, with the potential to go public in the future.

“Everyone feels very excited about the potential of these two companies,” said Catalyst CEO and co-founder Edward Chiu. “So everybody is rolling their stock into the new business and I think that’s actually why there’s so much belief and excitement as everyone believes this is going to be a big category creator.”

Chiu saw the merger as an opportunity for both companies to fill in each other’s gaps. He explained, “We need more enterprise customers, and they need our ability to drive innovation and ingest data very quickly. Part of this is that we are in a unique position to cherry pick the best features of both companies and merge those together in a singular platform.”

The combined companies will operate under private equity firm Great Hills Partners, with Chiu and Totango’s Alistair Rennie serving as co-CEOs. Rennie sees great potential for the new company in the current market uncertainty, with the opportunity to help customers preserve revenue through retention, renewals, and expansion by combining Totango’s enterprise-grade features with Catalyst’s more modern interface and AI capabilities.

Christopher Gaffney, managing partner at Great Hills, believes that the combination of Catalyst and Totango has the potential to set a new standard in maximizing post-sale revenue. “The deep customer success expertise and enterprise capabilities of Totango combined with the intuitive design and forward-thinking vision of Catalyst create a powerhouse to redefine customer success and how businesses maximize customer lifetime value,” he stated.

Perspective investor and Work-Bench co-founder Jessica Lin shares the same sentiment, saying, “Our goal is for this combined entity to own the customer success market and have an even bigger outcome than Gainsight (which exited in late 2020 for $1.1 billion). That’s why we don’t want a cash payout now, but would rather see continued upside from our stock in this new joint entity.”

Before finalizing the merger, both companies gathered feedback from their customers, which was overwhelmingly positive. While they will continue to operate separately for the next few months, the process of merging and working out technical and operational details has already begun.

Founded in 2010, Totango has raised $146 million, with a majority of that coming from the $100 million investment from Great Hills in 2021. Catalyst, founded in 2016, has raised over $66 million. The two companies are poised to create a major disruptor in the customer success market.

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Max Chen

Max Chen is an AI expert and journalist with a focus on the ethical and societal implications of emerging technologies. He has a background in computer science and is known for his clear and concise writing on complex technical topics. He has also written extensively on the potential risks and benefits of AI, and is a frequent speaker on the subject at industry conferences and events.

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