Cello has raised €2.3m in pre-seed funding, in a round led by byFounders, with participation from Tiny VC, Possible Ventures and Notion Capital; together with operator angels from Youtube, Personio, McMakler, and others.

It has long been the case that cost of customer acquisition is the main factor that limits the top-line growth of SaaS companies. In the current market, growth is being squeezed by external factors too. On a macroeconomic level, founders are struggling with the new reality of the tech downturn. Additionally, the cost of advertising is skyrocketing. 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 (CAC). Cello is leading the creation of a new category of ‘User-Led Growth’ — a next evolution in customer acquisition strategies that harnesses existing user base to drive word-of-mouth growth, at a dramatically low CAC.

“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 optimise 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," says Stefan Bader, co-founder and CEO at Cello.

Cello's platform enables SaaS businesses to amplify word-of-mouth

Word-of-mouth is a key factor in evaluating traction in early- and growth-stage startups. Despite its importance, the channel is not well understood by founders. 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.

Cello’s platform redefines 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.

“The fastest growing companies already rely on self-engineered growth loops to amplify word-of-mouth. Cello’s approach revolutionises 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,” says Eric Lagier, Partner at byFounders.

“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,” says Philipp Möhring, Partner at Tiny.vc.

Cello counts high-growth SaaS companies including Demodesk, Sastrify, Unlock, Butter, and others amongst its customers. 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.

Simon Leicht, Partner at Possible Ventures, “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.”