Making word-of-mouth an informed business strategy, Munich-based Cello has just raised €2.3 million to build its user-led growth platform. The martech tool is set to be a revolutionary part of the customer acquisition toolbox and is already trusted by top SaaS names. 

Customer acquisition is the most fundamental element of any business. Whether it is getting that first customer or the millionth, each customer successfully onboarded takes a set process, time and commitment. For SaaS companies, in particular, customer acquisition has been long-regarded as one of the main factors limiting top-line growth – and it’s getting trickier with existing strategies going stale and getting costly. 

Word-of-mouth about a product or service isn’t a new way to attract customers. In fact, for anything from SaaS to restaurants, word-of-mouth is possibly the most trusted type of recommendation. For marketing and sales teams, though, it’s something they have little control of and there’s not really been a way to leverage it. That is until now. 

Cello, a Munich-based startup has developed a user-led growth platform tapping into word-of-mouth as a valuable growth channel. Only in its first year of life, the company has raised €2.3 million. 

Stefan Bader, co-founder and CEO at Cello: “Scaling product distribution is top of mind for every new software venture, with founders looking to gain an edge over the competition. Top companies are already tapping into their user base to attract and convert new customers, and see further opportunities to optimize this part of the sales journey. This is where Cello comes in. We help SaaS companies turn word-of-mouth into a customer acquisition superpower.“

Funding details

The pre-seed funding was led by byFounders, with participation from Tiny VC, Possible Ventures and Notion Capital; together with operator angels from Youtube, Personio, McMakler, and others.

The company will use the funding to build out market share in Europe and North America. With a founding team consisting of serial entrepreneurs and veterans from Pitch, Twilio, and Typeform the company is well equipped for rapid growth.

Leveraging user-led growth

Founded in 2022 in Munich, Cello is pioneering the creation of user-led growth in a  new category of growth strategies, marking it as the next evolution of customer acquisition. 

In the current tech market, growth is coming up against a number of challenges. The European SaaS market enjoyed a lot of innovation in the past couple of years and has left a competitive market. Now, in times of economic uncertainty, founders are struggling to continue to onboard customers at the same pace. At the same time, advertising costs are skyrocketing – for example, Meta’s cost per thousand of impressions (CPM) is up 61% compared to last year; TikTok is up 185%, and Google programmatic display is up 75%.

Due to these market conditions, SaaS companies need alternative paths to growth. Evolutionary extensions of existing growth strategies have historically driven down SaaS customer acquisition costs. Now, Cello is leading the development of user-led growth as this next phase, harnessing word-of-mouth at a much lower CAC. 

Eric Lagier, Partner at byFounders: “The fastest growing companies already rely on self-engineered growth loops to amplify word-of-mouth. Cello’s approach revolutionizes the opportunities available to SaaS companies, by enabling them to unleash the real potential of the channel. It’s a product that couldn’t be better timed with the current market trends.”

Cello gives SaaS businesses the ability to rapidly grow word-of-mouth into a valuable acquisition channel. Whether a company is product or sales-led, SaaS companies are able to add a new ROI-positive, scalable channel in hours instead of months, without the need to manage any operational overhead.

The platform aims to redefine how incentivized referrals work in SaaS, by privately incentivizing users with a percentage of all the net revenue (MRR) they refer. This unique recurring commission approach results in bullet-proof fraud prevention, zero payback period, and a positive return on investment.

Philipp Möhring, Partner at Tiny.vc: “Word of mouth is the most coveted source of growth for early stage startups. We see self-engineered tools for amplifying word-of-mouth are often out of reach for companies who are laser-focused on building a great product. Cello enables this by making SaaS referral programs simple to set up and track.”

Already high-growth leaders like Demodesk, Pliant, Sastrify, Unlock and Butter are using CELLO to grow – showing a strong start and lots of promise for the future. 

Simon Leicht, Partner at Possible Ventures added: “The progress that Cello has made is terrific, especially as building a business in the rapidly growing SaaS market is hard, especially given the current global market conditions. The Cello team has a clear understanding of their market, and a well-defined vision of what they want to achieve. We look forward to working with the team.”