How Did "Kujiale" Become a "Hidden Champion" in SaaS with 110% NRR? | Yunqi Technology

How do you measure whether a SaaS company is truly valuable? NRR may well be the single most important gold standard — it's difficult to fake and nearly impossible to manipulate through financial engineering.

Manycore Tech (Kujiale), a global leader in 3D cloud design platforms, announced at its recent product conference that its overall NRR for 2022 approached 110%. What does this figure actually signify? And how did they pull it off?

In this edition of Yunqi Technology π, we bring you a data-packed analysis and a hardcore breakdown of Kujiale, an early portfolio company of Yunqi Capital.

Source: ToBeSaaS

Author: Dai Ke

➤➤➤ In early 2023, a report caught our attention. Manycore Tech (Kujiale) revealed at its 2023 annual meeting that the company had made initial progress toward its strategic goal of "high-quality development." One compelling piece of evidence: overall NRR for 2022 came in at nearly 110%. According to previously disclosed data, the company's net revenue retention rate for KA clients was as high as 130%.

You might point out that the median NRR for overseas SaaS companies already exceeds 110% — star SaaS player Zoom once hit around 150% — and that Manycore Tech still has considerable ground to cover. But I'd counter that those represent superlative benchmarks from the world's top SaaS performers. Manycore Tech's NRR of nearly 110%, meanwhile, would rank as "excellent" not just domestically but even by global standards.

Because retention isn't solely about retention — it's also tightly correlated with customer volume. If you only have a handful of clients, you could theoretically hit 200% NRR. But for Manycore Tech to achieve this rate across a massive customer base is genuinely impressive. Especially against the backdrop of generally low retention among Chinese SaaS companies, an NRR approaching 110% commands the industry's full attention.

In virtually any business domain, churn operates like gravity — an inevitable force of nature. This is precisely what makes subscription-based SaaS such a high-risk proposition. And in China's still-immature market, churn is the nightmare and silent killer haunting Chinese SaaS firms.

So how did Kujiale defy this gravitational pull and break through?

Good Company or Bad Company? Look at NRR, the Gold Standard

A SaaS company's value can be measured through many metrics — revenue, growth, profit margins, and so on. But each of these captures only one dimension of the business. For the long-cycle subscription model that defines SaaS, such metrics all feel somewhat one-dimensional.

NRR was designed specifically to measure a SaaS company's operational health scientifically and comprehensively. Crucially, unlike other metrics, NRR is extremely difficult to fabricate or manipulate through financial engineering, making it the industry's gold standard.

Only SaaS companies with genuine long-term vision are willing to target NRR as a north-star metric. This is actually a shrewd strategy, because only under NRR's guidance do operations and business processes become more disciplined and logically sound. Of course, capital markets also reward high retention more generously — NRR has outsized influence on SaaS valuations.

NRR isn't actually a single metric but a composite of multiple elements. Its formula is:

As this formula makes clear, Manycore Tech's NRR approaching 110% was no fluke or stroke of luck. It required getting every single component right simultaneously.

So the formula itself isn't the point — what matters is the business logic and effective execution behind it. What exactly did this company do right?

Technological Foresight and Product Obsession

As industrial-grade cloud-based CAD software, Kujiale has treated technology as its foundational pillar from day one, leading to breakthroughs across multiple proprietary core technologies today. Its technical domains span nearly every critical frontier in industrial software: geometric modeling, BIM construction, intelligent manufacturing, lighting simulation, and more.

Technology roadmaps typically run 5–10 years ahead of industry adoption. Kujiale began researching AI+design five years ago; now multiple AIGC applications are already being deployed in production. At its February product launch, the company formally established its AIGC Lab.

Yet in SaaS, technology is a double-edged sword. Tech-driven SaaS startups actually fail at very high rates, for two main reasons.

(1) Many technical founders become so enamored with their own technology that they lose sight of what customers actually want to achieve — which clients they're helping, and what business outcomes they're enabling.

They fail to grasp a simple truth: customers never pay for technology itself; they only pay for business outcomes. The SaaS industry is littered with technically impressive products that "critics love but nobody buys." And if nobody pays, there's no business to speak of.

(2) Another breed of technical founders believes their technology can do anything, so they spread themselves across every industry, domain, and scenario they can reach.

This isn't to say their ambitions are technically impossible — but scalable growth becomes impossible. And commercialization without scale is meaningless.

Either way, the ending is similar: massive capital burned, with no commercial exit in sight.

Kujiale is one of the rare SaaS companies to break through this "technology trap."

I've cited Kujiale's case repeatedly when advising SaaS startups on "how to choose an entry market."

At founding, Kujiale wasn't the only player in 3D cloud design. But leveraging its core cloud rendering technology, it identified rapid visual effect generation as its breakthrough point and quickly won its first wave of target users — designers, sales reps, homeowners, and others.

Simultaneously, Kujiale extended its business logic from design into marketing conversion, prying open B-side willingness to pay. As growing volumes of B, C, and D-side users came onboard, Kujiale identified the business outcomes sought by each customer segment and genuinely became a tool for improving efficiency across the entire industry.

From technology excellence to product excellence, layered with network effects, then continuous expansion into adjacent domains — this is how Kujiale evolved into today's end-to-end, all-space, all-ecosystem platform and became the dominant player in this vertical.

"Willingness to Invest" in Customer Success

Foresight is essential for SaaS entrepreneurship. Which track to choose, what solution to build, what future-facing technology to adopt — these decisions determine how far a venture can go.

But foresight alone isn't enough; investment is required too. In conversations with Kujiale, I've found that their highest self-assessment is "willingness to invest." In their view, today's results were bought through willingness to invest.

Actually, willingness to invest isn't unique to SaaS companies. Nearly all SaaS companies invest heavily — the difference lies in purpose and priority.

Some companies pour massive resources into sales to make revenue numbers look good. Others, hewing to PLG philosophy, invest heavily in product. Some prioritize brand and visibility through marketing spend. Still others ramp up customer success investment to quell customer dissatisfaction.

The SaaS industry burns through enormous sums annually, yet metrics reflecting true growth potential — like NRR — stagnate. In reality, single-point investment does little to advance a long-cycle business like SaaS.

Only dynamic, balanced investment across the business can form the foundation for healthy growth. Kujiale's practice confirms this conclusion once again.

As we know, a well-functioning SaaS company should have four core business functions: product management, subscription sales, customer success, and customer growth.

"Willingness to invest" essentially means, within a fixed total budget, dynamically and strategically allocating resources across these functions according to current strategy and development stage. Kujiale, for instance, was among the earlier SaaS companies to invest meaningfully in customer success.

Yet in practice, we often see SaaS companies with substantial CSM resources still suffering severe churn and persistently low NRR.

Actually, improving retention isn't solely customer success's job — it's the result of cross-functional collaboration. Customer success collaborating with product, sales, and operations, for example.

Collaboration requires inter-functional processes.

We know overseas SaaS typically employs a simpler business model: land and expand. But this model has proven difficult to execute effectively in China. That's because high retention for overseas SaaS companies stems less from low churn and more from expansion — upsell and cross-sell. In China, high retention first requires reducing churn, with expansion secondary.

Thus, domestic SaaS business models are relatively more complex and granular — the so-called ALAER model.

This model adds two more granular phases: Adopt and Renew.

This is because statistical analysis shows: over 60% of post-purchase churn results from failed adoption, which directly impacts NRR. Renew is added because domestic clients tend not to proactively renew, creating significant risk of expiration churn (use-it-and-leave-it).

So simply increasing CSM headcount doesn't solve retention; granular customer success operations are the real answer.

For traditional enterprise software, revenue is recognized upon software delivery to the customer. SaaS is different: on average, over 80% of revenue is earned during the customer success phase.

Therefore, delivery and participation in the customer's business process become essential. Traditional delivery is "helping the customer into the saddle and seeing them off"; SaaS is "accompanying the customer all the way to the destination."

Kujiale's emphasis on "user adoption" and "delivery with participation" stands out exceptionally in the industry. They not only maintain a highly professional customer success team but have made customer success participatory and interactive. For example, CS teams embed deeply within industry clients, designing alongside designers and co-designing business collaboration workflows with managers.

I should note: these aren't things Kujiale told me — I learned them from their customers.

This operational approach naturally requires higher investment, but yields higher returns too. Particularly in elevated customer experience, which drives more customer referrals, making sales, renewal, and expansion non-issues.

So it's hardly surprising that Manycore Tech achieved 110% NRR.

High Retention Enables High Growth

While there's no guaranteed formula for SaaS success, there is a universal success logic: Customer Outcomes (CO) + Customer Experience (CX).

Customer Outcomes mean the business results customers want to achieve or the goals they want to reach. A CO encompasses: business purpose, ROI, KPIs, accountable parties, and best practices. COs also represent quantified value — they're the primary driver of customer payment.

Customer Experience, meanwhile, is how customers feel using the product and service, including interactions with CSMs.

Why is NRR so low for many Chinese SaaS companies? The main reason is overemphasis on CX with little or no attention to CO. This may attract some users, but without CO, customers won't stick with a SaaS product long-term, let alone renew or expand.

The logic is straightforward: something useless, however cool or well-designed, has no real value. This aligns with Manycore Tech's stated commitment to "high-quality development": creating value for customers while remaining profitable.

Latest figures show Kujiale has surpassed 51 million registered users globally, with nearly 40,000 brand enterprise partners. These customers range from Fortune Global 500 and China 500 enterprises to large numbers of SMBs, plus extensive individual paying users attracted through PLG.

From the outset, Kujiale identified the COs for each customer segment, then pushed CX to the extreme. These two factors are the fundamental guarantee of customer retention. They also neatly explain the logic behind Kujiale's high NRR.

The essence of SaaS is "doing business with existing customers," so its growth model differs fundamentally from traditional software. This is evident from the ARR growth formula:

ARRn+1 = ACV + ARRn - Churn

A low-NRR SaaS business is like a leaky bucket — no matter how much water you pour in, the level never rises, so growth never happens.

Conversely, in a high-NRR SaaS business, water leaks out far slower than it pours in, so the bucket quickly overflows. That's how growth happens.

The problem is that the cost of pouring water (CAC) is simply too high, ultimately making the SaaS business unprofitable and growth impossible.

In fact, many Chinese SaaS companies, due to flawed business models and misallocated resources, have turned themselves into leaky buckets. More unfortunately, their solution isn't to fix the leak but to pour water more aggressively, mistaking water volume for growth performance — no wonder real growth never materializes.

An NRR approaching 110% makes Manycore Tech genuinely unusual. But this didn't happen by accident.