CreativeCo invests $1.5M in Churnkey, the leading retention automation platform

As a consumer of anything these days, it’s clear that the subscription economy has overtaken how we engage with our favorite providers of goods and services. At home, we can get subscriptions for our groceries, our clothes, our medications, our exercise, our entertainment, our transportation, and pretty much anything else. At work, the subscription economy has overtaken all of our software, IT infrastructure, and various departments of our businesses. All of these subscriptions are enabled digitally via relationships with our credit card accounts. We all live in a credit card subscription enabled world.

It is estimated that $1.5 trillion will be spent next year with subscription-based businesses. For recurring revenue businesses, the very most important determinant of success is customer retention. Therefore, every subscription business tries to maximize customer retention / minimize churn in order to build enterprise value. No matter what your churn percentage, any churn should be targeted.

Nick Fogle, Rob Moore, Baird Hall and Scott Hurff (left to right above) were previously running a subscription-based software company when they made a key discovery about customers who wanted to cancel their subscription. A pretty high percentage of customers would change their mind about cancelling if they were offered a short-term pause in the subscription. They discovered that various offers could be presented to customers within a cancellation flow, and a large percentage of customers that would have churned out could be retained as a result.

So after exiting their prior software business, Nick, Rob, Baird and Scott teamed up in 2021 to create Churnkey, a retention automation platform.

Churnkey provides software to subscription-based businesses to completely automate retention strategies along the customer lifecycle. If customers want to downgrade or cancel, Churnkey’s software offers up alternate options. If customers’ credit cards fail, Churnkey fixes the issues. If customers cancel, Churnkey works to reactive them. The retention strategies along the lifecycle are all white-label and configurable, and everything is completely automated at scale. As a result, the ROI for Churnkey’s growing suite of retention automation products is super obvious, transparent, and sums up to big dollars. It’s no surprise that Churnkey has attracted customers from well-known software companies to big fitness apps to the largest car wash companies.

Today, we’re excited to announce that CreativeCo has led Churnkey’s $1.6M financing via our newly launched, early growth equity-focused CreativeCo Fund III.

We met the Churnkey team in the summer of 2023 and were impressed with the rare combination of very high growth (>3x) and high capital efficiency (>2x ARR / capital spent). While the team was keen on bootstrapping their business, there were opportunities emerging that clearly justified investing more into their growth. By the end of 2023, the Churnkey team and CreativeCo were aligned in putting together a deal that provided just enough fuel to keep their high growth / high capital efficiency ethos moving forward.

We believe Churnkey can lead the retention automation space with a platform that automatically and intelligently runs retention strategies throughout a customer subscription from trial through post-cancellation. Churnkey’s ability to integrate directly with payment platforms and leverage product usage data provides the foundation for an expanding suite of retention automation offerings that generate concrete ROI.

We greatly appreciate Nick, Scott, Rob and Baird for giving us this opportunity to invest, and we look forward to putting our growth equity studio to work to help create value.