DiscoverOrg Announces Growth Investment Round

GZ Consulting Financial Figures Gathered from DiscoverOrg Revenue Announcements.
GZ Consulting financial figures gathered from DiscoverOrg revenue announcements.

This morning, tech sales intelligence vendor DiscoverOrg announced its second funding round to assist the company’s growth. Investors included Goldman Sachs BDC, NXT Capital, Silicon Valley Bank and Antares Management. In 2014, DiscoverOrg quietly accepted a growth equity investment from TA Associates and FiveW Capital. The firm did not disclose the size of either round but told The Columbian that the current round was at least a seven digit investment.*

CEO Henry Schuck said that the round did not fall into traditional Series A / Series B designations as it was not designed to address financial needs so much as bring in a set of strategic advisors to help guide company growth. Shuck noted that the firm has long been managed as a cash flow positive operation; thus, the funding rounds were not needed to fund growth but for garnering “seasoned technology and SaaS” expertise.

A secondary benefit of these relationships is they improve the company’s flexibility with respect to acquisitions. In the press release, the firm noted the opportunity to acquire firms in adjacent markets. DiscoverOrg acquired competitor iProfile last year and integrated their international datasets into their core database.

DiscoverOrg continues to build out its datasets. They recently announced their Technology, Engineering, Development, and Design (TEDD) offering which focuses on product management. Other datasets in development include sales and HR departments. A rest of world dataset covering AsiaPac and Latin America is also being readied for market.

Other priorities include doubling their engineering department to forty headcount so they can “build new workflow automation capabilities and integrations for sales and marketing professionals,” and “rapidly expanding” their IT, Marketing and Finance datasets.

“As companies continue to invest in CRM, marketing automation, predictive lead scoring and analytics, they’re realizing that the linchpin to achieving high ROI on these investments is not just having a core system but also adding in verified, high quality data that sales and marketing professionals can leverage to build pipeline and close deals,” said Schuck.

“We invested in technology, we rebuilt the platform from front to back, added integrations with marketing automation systems and CRM and rebuilt the front-end of the Salesforce app,” he added. “We are looking at the technology as more than a delivery mechanism for the data and have it more in the workflow of sales reps.”

DiscoverOrg continues its growth trajectory with topline revenue up 36% in 2015. Their annual recurring revenue now stands at $54 million and Schuck forecasts 40% to 60% revenue growth in 2016. DiscoverOrg is approaching 2,000 customers and has grown to 230 employees.

The firm no longer appears to be allergic to employing digital data collection methods so long as digital data serves as an input to their editorial processes. Shuck noted that the combination of digitally collected data with human verification “would be very powerful.” Shuck gained confidence in such techniques due to success using digital tools for identifying and verifying emails. Their recent experience of verifying the iProfile dataset demonstrated their capability to ingest large third-party datasets and verify the content.

They also recently announced a partnership to license vendor and product data from HG Data. HG Data covers many more companies than DiscoverOrg, so they focused on improving technology fill rates at their current companies. The firm conducted verification tests on the HG Data content and leveraged HG Data’s confidence scores. Of course, the HG Data content also provides seed data for building out new company profiles.

Expanding their data collection methods makes logical sense. While there is a certain purity to editorial only content, leveraging digital data generation and verification techniques allows the firm to focus editorial resources on difficult to obtain high-value datasets such as organizational charts while building out their company and contact coverage more rapidly.

DiscoverOrg also recently partnered with SalesLoft to upload DiscoverOrg contacts into the Cadence product. Sales reps can upload one or multiple records to specific cadences, allowing the reps to immediately begin campaigns. DiscoverOrg also supports an auto-refresh feature to maintain data quality over time.

SalesLoft CEO Kyle Porter argued that “What we’re seeing on the front end is a dramatic increase in the quality and quantity of intelligence on companies — the things that DiscoverOrg creates. We can help from there, via fine-grained analytics, which provide information on the right amount of calls, emails, and social contacts to make as well as the best time to execute those touchpoints.”

While the company offers a set of IT, marketing, and finance datasets on its website, they are flexible in their licensing. Firms can bundle multiple datasets or target companies by location or technology sets.

Although DiscoverOrg on the sales and marketing function, they have a sizeable business in the executive recruitment space with over 250 clients. DiscoverOrg supports two sets of recruitment use cases: staffing and business development (identifying HR contacts at target companies). The firm has also had success selling into HR departments, particularly at large financial services companies. By targeting staff at competitors, financial services companies can bring in seasoned professionals with a knowledge of their industry.

Schuck sees a strong future for DiscoverOrg as they find additional was to sell their datasets across user workflows and departments. A recent study estimated their IT Total Addressable Market (TAM) to be in excess of $1 billion. The marketing dataset was deemed to be a comparable opportunity while the finance market was sized at $400 million.

* Correction: The Columbian corrected their wording to read “at least” a seven digit investment.

 

 

 

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