Predictive Analytics and Audience Management vendor Leadspace completed its Series C. The funding round was led by Arrowroot Capital and joined by JVP. The $21 million round will be used “to grow our customer team in San Francisco and Denver, and our AI and data management product teams in Israel.”
The firm is assessing additional locations, including possible offices on the East Coast and Europe, “perhaps” London.
Arrowroot has taken a seat on Leadspace’s Board. The firm wanted growth equity advisors instead of traditional VCs for Round C. “At this point the investment is not just in the idea and the team, but also the underlying metrics and performance of the business,” said CEO Doug Bewsher. “Once you have “Product/Market fit”, the kinds of questions investors ask are whether you are ready to scale; what are the opportunities for further growth; and apart from additional investment can we be an investment partner that can help you address these opportunities?”
Bewsher noted that marketing has been transformed over the past seven years since Leadspace was founded. Firms are switching from tactical demand generation programs to targeted Account Based Marketing (ABM) communications. “No longer is it OK to just send out blanket “nurture” emails to everyone and hope that will generate positive customer engagements. No longer can you rely on a single data source as the basis to know your customer. No longer is it enough for marketers to just think of leads — they need to market to accounts, and teams of people. Neither can marketers afford to ignore intelligence and information from external parties, and simply rely on the limited info they gather internally.”
Not only has the nature of B2B marketing been transformed, but “world class B2B sales and marketing organizations” need to become more like consumer companies with a deep understanding of the account at multiple levels. Echoing Sirius Decisions, Bewsher said that B2B marketers need to “really know your customer at the account, demand unit and individual level, and then target and personalize your messaging to cut through the noise. And think customer-first.”
As an analytics company, Bewsher talks up the value of AI for sales and marketing as it begins to address specific problems and workflows:
AI is everywhere. While there is no doubt that it is going to change every corner of our life, both as private users and business people, I think we will start to move from the promise to the reality in 2018. In business-to-business sales and marketing in 2017, it was enough to say: “We have a ton of great data scientists who are working on new ways to better engage your customers.”
But in 2018 customers will look to see actual results — like the 90 percent increase in email connection rates we have seen from the deployment of AI to recommend the right way to engage a specific user. This will require a maniacal focus on specific use cases from the emerging area of AI.
One area where AI will improve revenue generation effectiveness is in ABM programs which has been limited by the human ability to consume information and the historical lack of data availability. However, “AI is changing all this, with the ability to consume and understand unprecedented amounts of information and turn this into action at scale and in real time. So sales and marketing teams now have the opportunity to drive much more relevant and effective engagement programs for their entire potential target audience.”
According to Leadspace, they are trusted by over 130 B2B brands and seven of the top ten enterprise software companies. Clients include Microsoft, Marketo, Oracle, and RingCentral.