Revenue Platform vendor Clari announced the acquisition of Sales Engagement Platform Groove this morning.  The transaction is expected to close on August 21.  No deal details were released.

“This is the most transformative day of our history,” Clari CEO Andy Byrne told VentureBeat. “It’s a big acquisition for us.  When we started this company, our thesis was grounded in the belief that AI would revolutionize how businesses manage revenue. More specifically, our vision was to assist CEOs in answering the critical question of whether they would meet or miss revenue targets.  We aimed to offer a predictive solution to address the common issue of revenue leaks that many companies face. Our goal was to help them achieve what we call revenue precision.”

The courtship began two years ago when Clari customers began asking about Groove. Around the same time, Groove was implemented internally. The firms launched a Groove / Clari integration last year with a strong UVP.

The deal brings the firms closer to creating a full customer lifecycle platform, with Groove supporting Sales Engagement and Engagement Analytics alongside Clari’s Conversational Intelligence (Clari Copilot), Digital Sales Room, and Revenue Operations capabilities.  Clari will recommend sales actions that limit revenue leakage, which reps can execute in Groove without switching applications.  Groove engagement data will be fed back into Clari, helping identify deals at risk.

“Most CEOs have a tough time answering the most important question in business: ‘Will we meet, beat, or miss on revenue?  By bringing together Clari and Groove, revenue leaders can implement their revenue collaboration and governance strategy across all internal and external workflows, giving them full visibility and control over the company’s most important business process – Revenue.”

Clari CEO Andy Byrne

Clari’s vision is to “bring the entire revenue process into one unified platform so our clients can consolidate, simplify, [and] accelerate” their go-to-market.

According to Clari CMO Kyle Coleman, every CRO, CFO, and CEO he has spoken with over the last six months has emphasized the need to consolidate, simplify, and accelerate their revenue cycle.

“We’re really excited to be able to lean onto this macro trend of consolidation.  But it’s not just consolidating for the sake of saving money.  It’s consolidating for the sake of reducing complexity, simplifying, and improving your revenue results,” Coleman explained to GZ Consulting.  He is ”really confident” in the firm’s expanded capabilities and sees them as “exactly what revenue teams [want] right now.”

From 2013 until 2021, Clari focused on building revenue reporting and a revenue database (RevDB) with time series data.  Information is gathered from CRMs, emails, calendars, etc., with Groove soon feeding its activity data.  RevDB also ingests external data from data warehouses and Clari’s digital sales room functionality.  Data is stored and analyzed in RevDB with support for six products:

• Sales Engagement (Groove)
• Conversational Intelligence (Clari Copilot / Wingman acquisition)
• Deal Management
• Revenue Forecasting
• Mutual Action Plans and Deal Rooms (DealPoint acquisition)
• Data Capture and Ingestion

“Clari’s RevDB architecture has been a long-term investment by Clari and is the secret sauce that powers the company’s unmatched revenue AI (RevAI) capabilities,” stated Clari.  “With Groove added to the Clari portfolio, revenue teams will get real-time insights and suggested actions across every revenue workflow to create and convert more pipeline, while company leaders will be able to see every input, tie every activity to results, and precisely predict revenue outcomes.”

“We’re augmenting the CRM with information that reps are never going to create manually.  And then we’re pulling that into our database to build our machine learning and AI models,” explained Coleman.

Last year, Clari acquired Conversational Sales Platform Wingman and added it to its deal monitoring and analytics workflows.  The integrated service was recently rebranded Clari Copilot.

“It expanded the workflows that we’re running for revenue teams, bringing call recordings into the flow of work,” remarked Coleman.  “You can actually hear and see what the customer is saying…Making CI less of a call recording solution for a call center and really more of a purpose-built solution for revenue teams.  While we’re doing that, we’re also adding this whole new dataset into the revenue database that makes us very capable for NLP and prescriptive AI…The RevAI capabilities we have made us capable of recording all these new AI use cases…We have all these different types of AI that we leverage across the platform.  We have the predictive components.  We have the generative components, and we have the natural language processing.  And we’re finding the right ways to expose that…in the flow of a rep’s work [and] in the flow of an executive’s work, so they’re actually getting the insight they need when they need it.”

Groove, already a Clari partner, allows sales reps to go from forecast and deal risk alerts to integrated actions, providing feedback loops and recommendations as a “closed loop of Insight and Action.”

When I spoke to the firms last year about their partnership, they presented an excellent joint value proposition presentation.  This messaging continued forward into their acquisition briefing.

A common issue for revenue teams is identifying revenue leaks and mitigating them.  Revenue leaks exist across the entire revenue lifecycle.  For example, deal slippage is identified in real-time by Clari, allowing reps to take action via Groove to bring the deal back on track. 

When Clari identifies a deal slipping for competitive reasons, it can suggest a play be executed in Groove.  Likewise, Clari can identify sub-par win rates, overly generous discounting, and low conversion rates for early-stage opportunities.

As Groove is native to Salesforce, it records all activities in real time, providing “full-funnel forecasting” and analytics to Salesforce and Clari.  Groove activity will also begin feeding into Clari’s RevDB time-series activities and conversations database.

“We can tie our campaigns through to revenue in Salesforce, and that is something that they (Groove’s competitors) cannot do,” argued Groove VP of Marketing Kristin Hersant.  “Then all of that rich data, tying engagement through to revenue, is pulled into Clari and used in the analysis, and that is available today.”

Coleman explained that while you can’t win a deal at any moment, you can certainly break a deal.  And once a deal is lost, “it’s very difficult to un-lose” it.  Thus, “if you don’t do the right thing at the right time – handle the right objection or pull the right person in or do the right kind of follow-up” – the deal could be jeopardized.  Therefore, “handling revenue critical moments expertly and in a prescribed way” and governed by best practices is critical in addressing revenue leaks.

“Having all of that insight into all these moments that exist and then having confidence that every one of your employees is going to be able to execute on them?  Well, this is what’s so exciting to us,” said Coleman.

Clari customers benefit from a consolidated selling platform for prospecting and engagement.  The platform will turn insight into action, allowing sales reps to kick off a Groove Flow immediately.  They will also better understand “top-of-the-funnel effectiveness and tie it to down-funnel results.”

Clari customers “can use it [Groove] both to fill the funnel and execute the funnel, turning insights into action in real-time – closing that loop and knowing what’s happening at the top of the funnel.”  Revenue teams can tie activities to revenue results and “hone and change” their revenue process.

Groove customers also benefit from platform unification as they prioritize activities, simplify forecasting, and enjoy a better understanding of deal status.  They will leverage analytics that tie activity to revenue impact, thus improving outcome predictions.

Furthermore, leaders will receive “end-to-end visibility of the revenue process by connecting sales engagement with conversion.”

“The goal is to consolidate all revenue-critical technology for all revenue-critical employees,” stated Coleman.  While the focus is on supporting the revenue team, Clari is finding that other stakeholders, such as finance and product management, also benefit from the ability to track sales activity.

For antitrust reasons, Clari has not discussed pricing with Groove for the six products but expects to have it locked down by the end of the month.  Reps will be quickly trained on the combined offering, and a unified team will be at Dreamforce.

“We’re bringing all of our quota carriers together for a two-day super deep dive – everything you need to know about the Groove product [and] everything you need to know about the combined platform.  We don’t want our sales reps to show up uninformed when they take the first meetings, and we expect there to be a healthy amount of demand coming in for this combination,” explained Coleman.  “We’re on this path to be a truly multi-product company.  And part of that journey is creating a true co-sell playbook.  When does it make sense to sell the full platform?  When should it be Groove standalone?  When should it be Groove plus Copilot?”

“The ultimate goal from a Go-to-Market standpoint is to be the single revenue platform that’s used by all revenue employees,” continued Coleman.  “We feel really good about this vision that we have to be the most used platform.”

Clari already has $1.5 trillion in revenue under management and over 1,500 customers.

Groove co-founders Chris Rothstein and Austin Wang will join Clari and oversee the Groove product line’s strategy, product direction, and customer success.

“I’m incredibly excited about the power of combining Clari’s Revenue Platform with Groove’s best-in-class pipeline creation and conversion capabilities,” said Rothstein.  “Together, we will create more pipeline and enable sellers to act on opportunities with incredible speed and effectiveness.  Revenue teams are looking to win more, faster — and Groove and Clari are bringing the rocket fuel.”

The first stage of the Groove integration is planned for October.

“This acquisition will create a sense of urgency in the market that leads all key players to step up their focus to create their own version of a revenue orchestration platform,” opined Forrester Principal Analyst Seth Marrs.  “It’s a significant win for all companies looking to improve sales performance.”

“Consolidating to create a more comprehensive platform is the best option in this environment,” continued Marrs.  “Those that don’t, face the less appealing prospect of a down round or going out of business.”

“B2B sales tech buyers want to take advantage of AI for sales and simultaneously reduce complexity in their tech stack,” said Gartner Senior Director Analyst Dan Gottlieb.  “Clari with Groove now has the pieces to deliver a complete revenue hub with interconnected workflows and deep data integrations.”