DiscoverOrg Acquires Zoominfo

DiscoverOrg and Zoominfo Acquisition History
DiscoverOrg and Zoominfo Acquisition History

Industry consolidation continues apace in the sales and marketing intelligence industry.  This afternoon, DiscoverOrg announced the acquisition of Zoominfo, just eighteen months after acquiring RainKing.  Zoominfo acquired technographics vendor Datanyze in September, so DiscoverOrg will be integrating both a contacts vendor and a technographics vendor.

The acquisition moves DiscoverOrg into the number two position in the Sales and Marketing Intelligence space with $230 million in joint revenues.  Only LinkedIn Sales Navigator has a larger market share.

Debtwire leaked the deal on January 25th indicating that “Zebra” was a direct competitor.  According to Debtwire, DiscoverOrg was “pitching its unrated buyout loan package on strong recent growth and a story that the whole will be greater than the sum of its parts, said five buysiders familiar with the deal.  Meanwhile, levering up the capital structure draws attention to the borrower’s ability to meet synergy projections – which could crimp its free cash flow, especially amid an ambitious technology integration plan, they said.”

Debtwire indicated that the acquisition was priced at $800 million, a three-fold increase from Great Hill’s summer 2017 acquisition price of $240 million for Zoominfo.  Debtwire also indicated an FY18 management adjusted EBITDA of $62.7 million for DiscoverOrg and $17.7 for Zoominfo.

Revenue Growth Data from Inc. 5000 (2011 - 2017) and Debtwire (2018)
Revenue Growth Data from Inc. 5000 (2011 – 2017) and Debtwire (2018)

Revenue growth for both companies is strong.  DiscoverOrg has made the Inc. 5000 list for eight straight years and Zoominfo for the past four years.  Debtwire indicated revenue growth figures of 26% and 30% over the past two years for DiscoverOrg with revenue hitting $152 million in 2018.  Zoominfo has grown at an even faster pace over the past two years with growth rates of 63% and 44%.  Thus, Zoominfo revenue grew from $39 million in 2016 to $91 million last year.

Based on the Debtwire revenue numbers for 2018 and historical revenue figures from the Inc. 5000 list, DiscoverOrg had a seven-year CAGR of 61% and Zoominfo of 34%.  Zoominfo’s growth rate is mostly organic while DiscoverOrg’s organic seven-year CAGR, after adjusting for RainKing revenue, is around 53%.

The two firms are strongly complementary.  Zoominfo provides the deepest set of B2B emails and direct dials with content mined from email signature blocks.  DiscoverOrg offers deep technology profiles (technographics and project plans) alongside human verified bios (skills, responsibilities, education, work histories, emails, direct dials, and social links), org charts, and company profiles.  DiscoverOrg’s human verification supports a 95% data quality SLA for its contacts.  Zoominfo’s Datanyze acquisition provides DiscoverOrg with additional NLP tools for determining products and vendors alongside market share analytics tools for marketing and competitive intelligence teams.

“Business data is rapidly changing and your data platforms must be built to adapt,” said Zoominfo CEO Derek Schoettle in September.  “ZoomInfo has the largest, most complete data set of companies and contacts and a goal to enable our customers to automate, process, curate, and present the data on-demand and in real-time. Delivering industry-leading technographics, the Datanyze technology will be a significant addition to help us deliver the right data, at the right time, to the right person.”

“DiscoverOrg’s deep, research-verified, actionable insights coming together with ZoomInfo’s comprehensive coverage of 100M business professionals is an unrivaled combo,” said the firm.  “We each employ different, but highly advanced technologies and tools to gather, cleanse, and maintain at an unparalleled scale.”

“To effectively capitalize on growth opportunities, companies of all sizes need accurate firmographic, technographic, contact, and intent data. Combined, DiscoverOrg and ZoomInfo deliver the trifecta: B2B data of the highest quality, quantity, and depth.”


DiscoverOrg CEO Henry Schuck

Over the past few years, sales intelligence has moved from a standalone browser research service for sales reps to an integrated workflow solution tied into CRMs, Marketing Automation Platforms, Sales Engagement Platforms, Chrome Browsers, and email.  DiscoverOrg has been at the forefront of these integrations with a broad set of platform connectors.  CEO Henry Schuck emphasized these workflow tools during the announcement.  “High-quality data is the fundamental go-to-market requirement for growth. In the near future, CRM and marketing automation systems will be defined not by their empty-box capabilities – but by the data that is housed inside them.”

While highly complementary, the combined companies remain weak with respect to deep company profiles.  DiscoverOrg recently added family trees, but they are to the subsidiary level, not branches.  They also lack public company financials, US and UK filings, SWOTs, and industry research.

When DiscoverOrg acquired rival RainKing in August 2017, CEO Henry Schuck stated the following goal, “The path to rapid revenue growth is paved with highly accurate, actionable, and predictive sales and marketing data, and the combination of RainKing and DiscoverOrg means that our joint customer base has access to an extraordinary portfolio of data, contextual buying insights, and predictive intelligence.  We are building a company that is to sales and marketing intelligence what Salesforce is to CRM.”

Schuck’s vision was updated today:

“Every sales and marketing team will have a go-to-market operating system that identifies the prospects that should be engaged every day, week, and month based on buying signals and intent data collected in a multitude of different ways. Even better, they have deep insights on the buyers who are making the purchase decisions with accurate contact, org chart, technographic, and firmographic data. It’s all at their fingertips and it’s all served to them dynamically – wherever they are working.”


DiscoverOrg Statement

DiscoverOrg stated that support, service, and sales for all products will continue.  Both platforms will be sold for the next six to twelve months “with highly coordinated sales and marketing efforts to ensure customers realize the most value from the platform(s) that best serve their needs.”  In March, joint customers will have a light integration between the two platforms followed quickly by DiscoverOrg customer access to Zoominfo company and contact data.

“As we combine the best of both platforms over the next year, customers will have the best, bar-none, B2B intelligence platform -the highest quality data with the broadest coverage and deepest actionable insights,” said the firm.

The combined company has 15,000 active customers and 120,000 active users, with the Zoominfo acquisition trebling the customer count.

DiscoverOrg stated that there are no plans to shutter any of Zoominfo’s locations and that hiring will continue for all Zoominfo offices.  Zoominfo has more than doubled its staff over the past year with headcount spread over six locations: Waltham (MA), San Mateo (CA), Grand Rapid (MI), St Petersburg (Russia), Kazan (Russia), and Ra’anana (Israel).  Zoominfo moved into a new headquarters location in Waltham, MA just last month.  The lease provides space for up to 450 employees.  Globally, DiscoverOrg has over 1,000 employees.

DiscoverOrg’s investors include TA Associates, The Carlyle Group, and 22C Capital.

DiscoverOrg Expands Coverage

DiscoverOrg now offers two classes of segregated companies and contacts.
DiscoverOrg now offers two classes of segregated companies and contacts.

DiscoverOrg, which has historically focused on decisionmakers at top companies, greatly increased its company and contact coverage last week.  The firm now collects data on 500,000 global companies, trebling its coverage.  With respect to contacts, coverage grew five-fold to 20 million decision makers.  All of the new companies are headquartered in the United States, but roughly 27% of the new contacts work outside of the United States.

The expanded company and contact data has long been captured by DiscoverOrg but not presented within their service.  Thus, adding a lower tier of records presented a problem which was solved by segregating the records into two categories: Research Verified and Technology Generated.  Research verified profiles are collected and audited editorially.  They are subject to DiscoverOrg’s 95% data quality SLA with 96% direct dial fill rates and 98% email fill rates.  The research verified dataset spans 4.35 million contacts across 163,000 global companies.  This dataset remains their primary universe.

The technology generated dataset is collected, validated, deduped, and categorized by DiscoverOrg’s platform.  The dataset spans 15.5 million contacts across 319,000 additional US companies.  As the dataset also includes technology generated contacts at research-verified companies, sales and marketing can utilize the technology-verified contacts when there are few eligible contacts with the desired titles within the human-verified dataset.  They can also drill down into a universe of smaller companies not subject to human verification.

“The dramatic growth of our database is due to rapid advancements in technology-enabled processes built on a decade of expertise with human-verified research. This human+technology approach has allowed us to develop unique assets for cleansing, verifying, and maintaining data that gives our customers the best advantage available: deep, accurate and complete data that fuels their growth.”

Derek Smith, DiscoverOrg Senior Vice President of Data

When prospecting, human-verified and technology-verified contacts are displayed as separate lists.  When viewing contacts in a company profile, the human-verified contacts are displayed by default, but the technology-verified contacts are accessible if needed.

DiscoverOrg built its reputation with a human-researched and verified database of top companies which includes org charts, real-time buying signals, sales triggers, and technographics.  The firm is now deploying “proprietary technology and human-in-the-loop automation” to deliver “a significantly broader universe with levels of accuracy not typically seen at these volumes.”

DiscoverOrg President Katie Bullard did not provide details on their technological verification processes, but stated, “We have a variety of proprietary tools and technologies that ensure the highest level of depth and quality available in the market.  Some of these include tools for retrieving and validating direct dial phone numbers, email verification tools, and tools that parse job descriptions to identify technologies used.”

The expansion provides deeper coverage of SMBs.  94% of covered companies have fewer than 1,000 employees and 75% have fewer than 100.

The new contacts have a minimum of a corporate phone, email, title, department, and company.  Approximately 27% of the new contacts include direct dial phones.  DiscoverOrg is confident that email accuracy is above the industry standard.

“With this launch, no other company in the industry offers the data quality and depth that smart go-to-market motions demand, AND the data quantity to reach entire addressable markets,” claimed DiscoverOrg.

While DiscoverOrg covers international companies in its human-verified dataset, they do not have an international office, “but we’re always considering our international strategy,” said Bullard.

DiscoverOrg Expanded Content

DiscoverOrg now displays 22,000 global family trees to the subsidiary level.

DiscoverOrg, which has long emphasized technographics and contacts, expanded its company intelligence with the addition of global corporate hierarchies and private equity / venture capital funding intelligence.  DiscoverOrg also expanded its contact / biographic coverage with detailed work histories, educational profiles, and North American mobile phones and personal emails.

“The traditional playbooks for B2B prospecting and corporate recruiting don’t work anymore.  Today’s buyers and hires expect highly personalized outreach at the right time that cuts through the mass-produced noise we’re all inundated with. The additional data we are now delivering make it even easier for our customers to craft the right message and engage where and when they are most likely to get a response.”


DiscoverOrg CEO Henry Schuck

Family trees are color coded and available for 22,000 global companies along with their divisions and subsidiaries.  Tree nodes may be expanded and collapsed, allowing sales reps to customize their view.  Users may link to major subsidiaries that are also contained within the DiscoverOrg company universe while non-covered subsidiaries are grayed out.  Tree nodes include logo, location, and ownership type.

DiscoverOrg has long offered org charts highlighting contact reporting structures, but family trees have been a gap in their service until now.

Funding data includes total funding and round details such as amounts, dates, and investors.

DiscoverOrg did not disclose the sources of their new data sets beyond saying they were licensed from “leading third-party data providers.”  The new content was verified by their 250 editors and DiscoverOrg’s automated verification processes prior to being presented to clients.

DiscoverOrg continues its rapid content build out with 4.3 million human-verified contacts across 160,000 top global companies.  Additional functionality around the family trees is planned for the next three months.  The firm also expects to add funding data screening to their build-a-list functionality.

“Our biggest differentiator is our ability to bring together proprietary technology,automated tools, and integrations that gather data – plus a layer of human verification to ensure its accuracy.”


Katie Bullard, DiscoverOrg President.

DiscoverOrg confirmed that they are on target for their $160M end of year ARR.

Consolidation in the Technology Sales Intelligence Space

Technographics, which were a relatively small segment five years ago, have grown rapidly and are in the midst of a consolidation phase.  Three years ago, DiscoverOrg acquired iProfile and then picked up RainKing last August.  This week, HG Data acquired London-based Pivotal iQ, Zoominfo acquired Datanyze, and DiscoverOrg rebranded.

Both acquisitions expand the scope of coverage of the acquiring firms.  Zoominfo had limited technographics prior to the Datanyze deal and now holds a deeper set of technographics along with analytics and visualization tools.  HG Data has expanded beyond product / vendor data to include contract and spend intelligence.

By my research, the IT sub-sector represents 18% of the sales intelligence space with DiscoverOrg in the pole position.  Overall, the IT sub-sector is $170 million and it is growing faster than the overall Sales Intelligence market.

“The recent acquisition activity shows the value and appetite for technology data enrichment,” said HG Data VP of Product and Marketing Kineon Walker.  “This consolidation cycle is happening as new companies continue to enter the space. As technology data continues to evolve and become more valuable to businesses of all sizes, we expect this sector to continue to grow and flourish.”

What we are seeing is the transition of technographic intelligence from a delighter five years ago to a must have content set for sales and marketing intelligence products.  Ten years ago, it was contacts and SMBs that made this transition. Eight years ago it was sales triggers.  Four years ago it was emails and direct dials.  Now it is technographics.

Next up it may be third-party intent data and the integration of first-party visitor intelligence into more sophisticated lead scoring and prioritization.

I will be covering both acquisitions over the next few days.

2017 North American Market Size

 

 

North American Sales Intelligence Market Sizing Model (Excel)

The 2017 Market Size of North American Sales Intelligence Vendors. Includes vendor product features, market share, and notes. GZ Consulting Copyright 2018.

$750.00

For the past few years, I have been sizing the North American Sales Intelligence Market.  This is the largest of the markets as Europe and AsiaPac are more fragmented (the UK is the only other mature market).

In 2017, I estimated the market at $950 million with LinkedIn Sales Navigator as the top vendor.  While new firms continue to enter, the top four vendors earn two of every three dollars in the industry.  The top four  concentration increased 7% last year, mostly due to the acquisitions of Avention and RainKing.

LI SN Market Share
The LinkedIn Market Share Section of the 2017 North American Sales Intelligence Market Sizing

The industry grew 17% over the past year with the majority of this growth being captured by LinkedIn Sales Navigator, DiscoverOrg, and ZoominfoTechTarget, which was off my radar in 2016, has also seen rapid growth in 2017 and 2018.

DiscoverOrg acquired RainKing at the end of August 2017 so two-thirds of its revenue was recognized as RainKing and one-third as part of DiscoverOrg.  Combined, the two firms earned around $118 million least year with DiscoverOrg ending the year with a $130 million plus ARR.  DiscoverOrg raked in two of every three dollars within the technology sales intelligence sub-segment.

LinkedIn holds a nearly 30% market share.  It has grown rapidly while remaining under the radar of its peers as it is often used as a complementary service to other sales and marketing intelligence services.

Data.com’s 2017 revenue was stable but Dun & Bradstreet forecasted a 30% drop in 2018 (D&B is a revenue share partner on the service).  I anticipate that much of this revenue will shift to other vendors in 2018 and 2019.  Dun & Bradstreet is in a strong position to take much of this share, but other vendors are pushing hard to acquire Data.com clients.

Zoominfo was ahead of the other sales intelligence vendors in recognizing the value of adding marketing functionality alongside their sales tools.  This has put them in a strong position for data services.  They also built the deepest set of global contacts with emails and direct dials and were early to build out connectors (CRM, MAP, Sales Engagement, and Chrome).

I am making my market model available for license (See PayPal button at top) as an Excel spreadsheet.  It includes revenue numbers by company along with market share, key features, and notes.

DiscoverOrg: 8 Years on the Inc. 5000

DiscoverOrg Revenue.png
DiscoverOrg continued its blistering growth.  It acquired RainKing at the end of August 2017 so only four months ($13 million est.) of RainKing revenue was included in DiscoverOrg’s 2017 revenue.  Another $26 million (est.) will show up in DiscoverOrg’s 2018 revenue.  The CAGR and revenue data was sourced from the 2014 through 2018 Inc. 5000 lists.

DiscoverOrg made the Inc 5000 list for the eighth straight year with three-year revenue growth of 184%.  The revenue was boosted by the acquisition of RainKing last August, but the firm would have made the list even without the acquisition.  Over the past six years, DiscoverOrg posted a compound average growth rate (CAGR) of 60%, growing revenue from $5.5 million in 2011 to $91.9 million in 2017.

“For 10 years, our singular focus has been on how to fuel our customers’ pipeline and revenue growth with the best B2B data available anywhere,” said Henry Schuck, DiscoverOrg CEO. “Being named to the Inc. 5000 list for the eighth consecutive year–and especially at the size and scale we are now–demonstrates our continued unwillingness to settle for anything less than excellence.”

Last year, DiscoverOrg more than doubled its database and increased its headcount by 50%.  DiscoverOrg’s Annualized Recurring Revenue (ARR) was over $130 million at the end of the year, indicating the firm was in a strong position to make the list again in 2019.  DiscoverOrg only recognized around $13 million in 2017 RainKing revenue over the final four months, so approximately $26 million in additional subscription revenue will hit their books in 2018.

2017 organic revenue growth was around $19 million.

“Out of the nearly seven million private companies moving the economy forward every day, only a tiny fraction have demonstrated such remarkably consistent high growth.  DiscoverOrg’s eighth Inc. 5000 honor truly puts the organization in rarefied company.”

  • James Ledbetter, Inc. Editor-in-chief

What is even more impressive is that DiscoverOrg passed InsideView and Avention (now D&B Hoovers) in revenue with a service that focused on the technology space while the broader sales and marketing intelligence services target the technology space, business services, professional services, and financial services.

DiscoverOrg has distinguished itself through

  • High quality data collected by its large editorial team
  • High fill rates on emails and direct dials
  • Technology and general sales triggers (Scoops)
  • Org charts at both the C-level and along functional lines
  • Biographies with technical skills and responsibilities
  • AI recommendations around both similar companies and recommended executives (AccountView)
  • OppAlerts Intent data (three-premium)
  • A broad set of CRM, MAP, Sales Engagement, and Browser connectors.

“Great data is magic,” tweeted the firm.

Or course, DiscoverOrg wasn’t the only B2B Sales Intelligence, Sales Engagement, or DaaS company to make the list.  I will cover Zoominfo, SalesLoft, and these other firms tomorrow.

DiscoverOrg: Next Generation OppAlerts

DiscoverOrg announced the next generation of its OppAlerts intent-driven technology intelligence service.  The premium service now delivers ten-times as many OppAlerts as before and integrates the alerts into its Build-a List-prospecting.  Only surging companies with Bombora Surge scores of at least 75 are flagged.

Surge scores are early indicators of intent to purchase based upon B2B media site activity.  A 75 signifies companies in the top five to ten percent of interest in a topic as compared to their baseline level of interest in that topic.  As much of the buyers’ journey takes place before purchasers contact a firm, reaching out to prospects during the early stages of the journey provides sales reps with an early movers’ advantage.

“The holy grail of the B2B marketing and sales world is to know when customers are actively researching your product or service,” said DiscoverOrg CEO Henry Schuck. “The DiscoverOrg – Bombora partnership allows our customers to know specifically what their prospects are researching and then which decision-makers to connect with, all in one place.”

The OppAlerts Surge score view allows users to see other topics currently surging at an account.
The OppAlerts Surge score view allows users to see other topics currently surging at an account.

DiscoverOrg switched from the Bombora firehose API, which delivered bulk raw data, to Bombora’s processed surge feed.  The upgraded service allows DiscoverOrg users to identify companies with surging interest in key topics, rank companies by purchase intent, route high-intent prospects to sales reps, and synch intent data with Salesforce for key topics.

Marketers can load a ListMatch file and have it immediately enriched with OppAlerts Surge scores by selected topics.  They can then filter by topic, review trends, and assess week-over-week changes in scores.  As the list is loaded into their prospecting engine, marketers can further refine the list by firmographics, technographics, biographics, and recent Scoops (sales triggers). DiscoverOrg has mapped all 4,100 topics to related job functions, allowing sales and marketing reps to quickly build targeted contact lists most likely to be interested in surging topics at key accounts.

OppAlerts identifies the contacts most likely to be buyers of products related to the intent topic.
OppAlerts identifies the contacts most likely to be buyers of products related to the intent topic.

The OppAlerts Build a List view displays current and historical intent data by company.  Users see the week-by-week score changes along with other surging topics at companies.  Lists may be saved for ongoing monitoring within the platform or via a weekly alert.  Thus, sales reps can monitor their ABM accounts and place calls when intent spikes at them.

The email alert highlights New OppAlerts, Biggest Gains, and OppAlerts by Topic.

Bombora OppAlerts are delivered to sales reps for stored alert lists.
Bombora OppAlerts are delivered to sales reps for stored alert lists.

“Bombora is the only provider of Company Surge data. Combining our insights about which businesses are more actively researching specific products and services with DiscoverOrg’s best-in-class firmographic and contact data brings the most actionable form of Intent data to B2B sales teams,” said Erik Matlick, Bombora Founder and CEO.

Pricing was not released, but the service is sold in both light and unlimited tiers.  Light tiers provide up to 100 surging companies per topic per month for 12, 25, or 50 topics.  Joint subscribers only pay a small fee for delivery of Bombora data from within DiscoverOrg.

DiscoverOrg has been working to build out its datasets.  They now cover 3.7 million contacts across 150,000 companies.