Drift the Latest RevTech Unicorn

Drift Founders Elias Torres and David Cancel.

Drift became the latest RevTech unicorn following a strategic equity investment by Vista Equity Partners.  The firm did not disclose the size of the investment nor its valuation, only that the valuation exceeded $1 billion.  Vista will hold a majority stake in Drift when the transaction closes in Q4.

“In partnership with Vista, Drift will continue to invest in its customers’ success while expanding its product leadership, scaling globally and bringing Conversational Commerce to more B2B businesses,” announced the firm.

Vista exclusively invests in enterprise software, data, and technology-enabled businesses.

Cancel told TechCrunch that Drift’s goal wasn’t to create a unicorn but that he and founder Elias Torres are proud to be examples for other Latino entrepreneurs:

“Drift is now part of the less than 1% of #latinx founded companies to ever achieve that milestone [$1B+ valuation].

Elias Torres ⚡️ and I believe we have a responsibility to pay it forward, to inspire other people, who are often marginalized and don’t believe they can break the glass ceiling to know that they too can do it. So today we want our #latinx community to know that together we have taken another step forward in our fight for an equitable future.”

Drift CEO David Cancel

Drift, which offers “conversational commerce for B2B,” has over 50,000 sales and marketing customer teams on its Conversational Sales platform.  Drift integrates chat, email, video, and artificial intelligence to power conversations on the website and with sales reps.

75% of its customers were described as mid-market enterprise clients by Cancel.  Customers include ServiceNow, Okta, Grubhub, Mindbody, Adobe, Ellie May, and Snowflake.

“Over the next decade messaging will continue to eat the world and that in order to survive and compete, enterprise businesses will need to flip the traditional model, remove friction, and put customers first. The businesses that win will be the ones that make it simpler for customers to buy from them…

Our bet is that conversations will transform the entire B2B revenue function, and with a partner like Vista, who has helped to transform and grow companies like Marketo and Wrike in recent years, we are excited for what’s next.”

Drift CEO David Cancel

Drift continues on its hypergrowth path, growing ARR 70% in 2020 with a similar growth trajectory this year. However, the company is not yet profitable as it is focused on growth. 

“Our purpose as a company remains simple and consistent: Build a platform that makes it simpler for customers to buy from you. We have an opportunity to bring learnings from the B2C buyer experience to the enterprise and introduce Conversational Commerce as a new B2B category,” said Drift CEO David Cancel.  “Given its extensive experience investing in next-generation SaaS companies, we believe Vista is the best partner to help Drift – and our customers – further these efforts.  I am excited to work with Vista’s team of investors, operators, and technologists who will help us fulfill our ambitious vision and lead the Conversational Commerce category for decades to come.”

Cancel has his eye on taking the company public, with Vista providing a “clear path” to an IPO.

“As a next-generation SaaS company with a strong leadership team, differentiated platform, and passionate customer base, Drift is uniquely qualified and well-positioned to define and lead this new market of Conversational Commerce,” said Monti Saroya, co-head of the Flagship Fund and senior managing director at Vista. “It is a privilege to partner with talented founders like David and Elias, and we look forward to supporting them and the entire Drift team to help advance their vision to remove the friction from business buying, and in turn, create tremendous value for customers as Drift’s hypergrowth continues to accelerate.”

Boston-based Drift slowed its employment growth rate with the advent of the pandemic but accelerated its hiring in 2021, with an increase of 151 employees since December. In addition, the sales team has grown 33% over the past six months to 136. 

Drift accelerated its headcount growth in 2021 after slowing it at the advent of the pandemic (Source: LinkedIn)

The company appears to have started a consulting organization, growing from 2 to 18 consultants over the past year.  In August, the firm hired Ryan Slinkard as their VP of Professional Services.

RevTech is a field with several minority immigrant founders of unicorns. I have recently also covered Manny Medina (Outreach CEO; Ecuador; $4.4 billion Valuation) and Tope Awotona (Calendly; Nigeria; $3B+ Valuation). Awotona was recently named a board member of SalesLoft, another RevTech unicorn.

Outreach: Growth through Redefinition

Sales Engagement Platform Outreach, which is enjoying significant growth and good press, has twice had to redefine itself.  The first time was a pivot from supporting recruiters to sales reps.  The second redefinition was cultural – reshaping its male-centric, burn-the-midnight-oil culture into a more inclusive, hospitable environment.

Forbes estimated Outreach revenue at $70 million in its last fiscal year (January 2020) up from $38 million in fiscal year 2019.  The firm is considering a direct IPO, but views that event as several years out.  In the meantime, “Our goal is to take Outreach and become a large, independent company,” says DFJ Growth partner Sam Fort.

Outreach’s initial sales were mostly into tech firms such as DocuSign, where the software saves reps at least ten hours per month by streamlining and improving sales communications.  “You have to land tens of thousands of customers and you can’t do that with a team of 100 people cold calling,” says DocuSign CRO Loren Alhadeff.  “Your best bet is to find a way to make your touches more important and more pertinent.”

Medina sees the opportunity as much broader and believes only 1% of the market has been tapped.  Sales engagement may even expand beyond B2B sales functions and support higher-end consumer sales roles such as financial advisors and mortgage brokers.

The path to success has been rocky.  The firm began in the recruitment space and was nearly bankrupt when it began marketing some internal sales tools it developed.  Outreach has also had problems with employee churn due to rapid hiring, a difficult winner-take-all pace that burned-out staff, and a male culture that permitted “sexually charged jokes.”

But Medina, an Ecuadorian immigrant, realized that cultural change was necessary.  “I don’t come from central casting.  I’m not an old white guy from Silicon Valley,” he said.  “I know what it’s like to be marginalized, so I take this to heart.”

To address these problems, the firm released managers that promoted the negative culture, centralized sales teams so that reps could learn from each other, and hired Anna Baird as COO.  Baird has focused on hiring and building an inclusive culture where “everyone has a fair shot.”

The executive team is now 40% female with a goal of parity.  “This is not a checkbox for me,” said Medina.  “This is the life I want to live.  I want to be surrounded by people who want to feel included, who are doing their best work with peers that they love and respect.”

Cancels Unleash 2020 (Covid 19)

SalesLoft and Outreach both made difficult decisions this week, canceling planned user conferences. SalesLoft aborted its Rev2020 conference, which was to open today, and Outreach scrubbed its April Unleash show.  Adobe, Zendesk, and Shopify also canceled events, while Twitter and Facebook pulled out of SXSW.

We have been closely monitoring the rapidly evolving situation regarding COVID-19 (Coronavirus). Our first priority will always be the health and safety of our community, employees, customers, and partners. After careful consideration of the developing situation, we have come to the incredibly difficult decision to cancel Unleash 2020 scheduled for April 7-9. 

Unleash is my favorite event of the year. I love having the chance to meet with all of you and share in the excitement of what’s to come. It’s with a heavy heart that we made the decision, but we believe your health and safety should come first, no matter what. 

Outreach CEO Manny Medina (March 3, 2020)

SalesLoft will still be presenting its opening keynote, but as a virtual presentation on Tuesday.  Outreach is planning a virtual event and twelve-city Unleash Summit tour later this year.

Vendors invest millions in marketing dollars hosting their own events. It is an excellent opportunity for them to build their brand, promote ecosystem partners, roll out their roadmap, provide specialized training by job function and role, expand their organizational presence at current accounts, and convert prospects to customers.