The CEO of Celonis, who won customers by sending them handwritten letters, just raised $290 million. Here’s the deck he used to sell the AI tool now used by Uber, Airbus and Siemens.
Category : entrepreneur
- Alexander Rinke, co-CEO and cofounder of Celonis, sent handwritten letters to potential customers in order to cut marketing costs — and to discourage assistants from throwing their proposals in the garbage.
- Celonis, which uses AI to quickly analyze a company’s computer network and find ways to make it operate faster and more efficiently, just raised $290 million in a Series C round that values the company at $2.5 billion.
- Rinke and his co-founders Bastian Nominacher and Martin Klenk were students when they started Celonis as a college project in Munich. They wanted to help ease the burden of IT support teams, who often have had to deal with repetitive and sometimes confusing tasks.
- “We used to call it IT ticket ping pong,” Rinke said. “One person would assign it to the next person and it would get sent back because they couldn’t figure out who was going to handle it.”
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Running a bootstrapped startup is tough, so Alexander Rinke, co-CEO and co-founder of Celonis, tried a quirky way to cut marketing costs: send handwritten letters to would-be clients.
They also figured it could be more effective, thinking a typical formal letter to a top exec would routinely be opened and thrown in the garbage by an executive assistant.
“We thought if we hand-write the letter and the address on the envelope an executive can’t just open it because it might be a personal letter, from a grandmother, a father-in-law or somebody,” he told Business Insider.
The plan worked. They sent 1,500 handwritten letters to executives of German businesses, dozens of which turned into solid sales leads.
Nowadays, Celonis, which uses AI to help businesses evaluate and fix IT processes, doesn’t have to worry too much about using offbeat cost-cutting tricks. The startup, whose process-mining tools are used by major companies such as Airbus, Siemens, Lufthansa and Uber, just raised $290 million in a Series C fundraising round that values the company at $2.5 billion.
The investment was led by Arena Holdings and includes Qualtrics CEO Ryan Smith and Procore CEO Tooey Courtemanche.
Started as a college project
Rinke and his co-founders Bastian Nominacher and Martin Klenk were students when they started Celonis as a college project in Munich. They developed software that could quickly analyze a company’s computer network, pinpoint choke points, and find ways to make it work better.
When a local broadcast station expressed interest in their tool, Rinke and his colleagues formed the startup in 2011. Each founder pitched in about $,5000 giving the company an initial investment of $15,000. “We bootstrapped for five years,” Rinke said.
But they signed their first big customer, Siemens, which led to other clients and investments from VC firms such as Accel and 83North.
“We are bullish about our future because we are growing really fast,” Rinke said. “Businesses need to remove friction from their processes and they need to improve their processes.”
One of their goals was to help ease the burden of IT support teams, who often have had to deal with repetitive and sometimes confusing tasks.
“We used to call it IT ticket ping pong,” Rinke said. “One person would assign it to the next person and it would get sent back because they couldn’t figure out who was going to handle it.”
Celonis is part of a wave of companies that are using AI and other technologies to automate increasingly complex networks and processes, especially in big corporations and organizations.
Celonis, he said, uses AI and machine learning “to take very noisy data that’s coming out of the system and we turn it into a virtual flow chart of the process that you can very easily understand.”
“Then we automatically discover friction points like bottlenecks and process loops where people just do the same thing over and over again,” he said.
Here’s a presentation deck Celonis has used to win over potential clients: