Pitchbook Expands European Coverage

Pitchbook CRM tabs cover companies, people, deals, investors, advisors, and news.
Pitchbook CRM tabs cover companies, people, deals, investors, advisors, and news.

Company profile vendor Pitchbook added 171,000 European company profiles along with financial data and M&A transaction details to their public and private company dataset.  The new profiles cover France, UK, Germany, Benelux, Ireland, Sweden and Norway.  Pitchbook also backfilled 35,000 European companies with financial data.

“Our customers require a holistic view into global financial market activity to make informed business decisions, which is the key driver behind PitchBook’s aggressive push to increase coverage of Europe’s financial ecosystem,” said Doug Trafelet, Managing Director at PitchBook. “The new companies and financials included in this dataset expansion provides unmatched visibility into company health and industry fluctuations, which simply cannot be found elsewhere. Continuing to add and refine our coverage of the European market will remain a key priority in 2018 and beyond, especially as PitchBook asserts its presence in region, both in terms of data collection and corporate footprint.”

The Pitchbook Platform is approaching one million global companies with profiles of nearly 900,000 private companies, 80,000 public companies and 800,000 transactions. Pitchbook data is delivered via browsers, mobile, data feeds, Excel, and CRM.  The Excel plug-in supports custom charting and twenty pre-built models for comps, tear sheets, and valuation.

Pitchbook has over 2,000 clients who “use PitchBook regularly to follow and analyze the flow of capital across the entire private and public markets.”  The firm is a subsidiary of Morningstar and has over 600 employees.

The firm did not disclose whether they directly gathered the European private company data or licensed it from a third party.  However, as the expanded country coverage matches CreditSafe’s recent expansion, it is likely that CreditSafe is providing the company financials.

Pitchbook also recently added a Chrome Browser extension which allows subscribers to right-click on a company to view a company profile.

The Pitchbook Chrome Connector provides immediate access to Pitchbook company intelligence.
The Pitchbook Chrome Connector provides immediate access to Pitchbook company intelligence.

 

Ignite Technologies acquires Infer

Infer Account Based Behavior Score
Infer Account Based Behavior Score

ESW Capital completed the acquisition of predictive analytics vendor Infer and will be rolling it into Ignite Technologies. Infer offers predictive lead and account scoring. Use cases include TAM identification, segmentation, account selection, demand generation, lead scoring, opportunity scoring, and upsell/cross-sell. In a September 2016 report, Gartner said that Infer pricing starts at $30,000 and increases based on the number of models. There are also charges for net-new contacts.

This summer, ESW also acquired company intelligence vendor FirstRain and rolled it into Ignite as well.

The Ignite Prime program offers clients access to additional enterprise technology once they have signed a contract for one of the Ignite Technology solutions. For example, Infer customers would have access to additional enterprise software solutions such as First Rain, ThinkVine, and Placeable equal to the value of their Infer contracts.

“We’ve been continually impressed by Ignite throughout this acquisition process. They have a strong leadership team and the right strategy that’s in line with where the future of sales and marketing solutions are going, where there’s a need to converge multiple products into a cohesive platform to drive true, full-circle customer intelligence. We’re confident this is the platform that our amazing customers will want to build on and grow, and are excited for the Infer solutions to be a part of Ignite’s Prime Program which will help customers drive 2x ROI.”

  • Vik Singh, Infer’s CEO

Infer was founded in 2010 and is headquartered in Mountain View, California. Infer focuses on predictive solutions for the technology sector and lists AdRoll, Cloudera, New Relic, Tableau, Xactly and Zendesk as clients. As of Q3 last year, Infer reported over 140 customers. Deal size was not disclosed.

SaaS Market Valuations

Venture Capital and Private Equity firms place a higher valuation on companies with recurring revenues. In Q1, software companies with a SaaS model received multiples of seven times revenue while other software companies received a multiple of 6.1.

“Any firm with recurring revenue is extremely attractive to investors,” said Rohit Kulkarni, head of research at SharesPost. “The subscription model translates to greater visibility of revenues, less volatility.”

According to PitchBook Data, Software-as-a-Service deals grew 217% between 2010 and 2016.

“SaaS is a more predictable and reliable revenue stream than if you had to go out and sell the software — the perpetual license model,” said Peter Fair, managing director at Golub Capital LLC.

Michael Larsen of Cambridge Associates said that SaaS models provide a “better measuring stick” as “these companies are moving toward more attractive, more readily transparent ways of selling products and they have attractive, meaningfully recurring revenues.” Employing a SaaS model does not prevent firms from failing but “it creates a more intensely analytical and measurable way of determining how a company is doing.”

For example, subscription firms that employ discounted offers to lure new customers may suffer from churn and see their business model unravel quickly. Subscription length needs to be carefully factored into valuing a firm and estimating its viability.

DueDil Posted Strong 2016 Turnover Growth; Positions Itself for European Expansion

DueDil's new credit risk filter allows users to filter prospects by the degree of trade credit risk.
DueDil’s new credit risk filter allows users to filter prospects by the degree of trade credit risk.

European private company information platform DueDil recently filed its 2016 financials with Companies House. Revenue increased from £1.21M to £2.25M. The startup continues to run in deficit (£6.17M), but that should be anticipated for an information services startup that is rapidly expanding its content and functionality. DueDil averaged 75 employees last year, up from 46 in 2015.

DueDil’s losses expanded last year as it pursued the European company intelligence market which it believes is becoming more hospitable.

“In the last 12 months, our competitive landscape has changed dramatically, Bureau Van Dijk got sold for $3.3 billion to Moody’s, and Dun & Bradstreet divested its Benelux division. This, along with our much better unit economics, gave our board and management team a clear signal to grow the product and the team and start to compete directly with them. The higher costs are the result of growing our product coverage from the UK and Ireland to pan-European, soon to cover 100 million+ companies.”

  • CEO Damian Kimmelman

Because subscription services are ratable, growth in revenue lags billings. Although enterprise sales grew 100% last year, much of this growth won’t show up in the top line until 2017. DueDil had its best quarter in Q1 and then grew 60% in Q2.

“Over the last 6 months, we have grown sales 5% week over week and are continuing to do so,” said Kimmelman.

To fund growth until its next equity round, the firm recently issued a £900,000 convertible note and plans to issue a £1.1 million convertible note. “I think you can assume that we wouldn’t be so bullish on a convertible if there hadn’t been an immediate liquidity event in sight,” Kimmelman told Business Insider. “I am not trying to be coy but that is all I can say.”


In product news, DueDil added Credit Risk and Ownership filters to its list building module. Sales and Marketing can employ the credit risk filter to remove prospects that are unlikely to pass credit checks or to target higher risk companies. The filter can also be used by credit risk and procurement teams during the onboarding process allowing them to streamline the processing of low-risk companies.

Ownership search filters assist with targeting firms with concentrated shareholdings which are “ripe for takeover.”  New Ownership screens include Total Shareholding Count, Individuals Count, Companies Count, and Shareholder Name.

Along with credit scores and ownership filters, DueDil supports a broad set of financial screening filters spanning 40 million companies in the UK, Ireland, France, Germany, Benelux, Norway, and Sweden with additional European countries in queue.

DueDil added four new shareholder filters for identifying firms "ripe for takeover."
DueDil added four new shareholder filters for identifying firms “ripe for takeover.”

2016 North American Market Size

2016 North American Sales Intelligence Market Sizing Model (Excel)

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

$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 with Bureau van Dijk, Avention UK, Artesian Solutions, and DueDil offering full solutions).

In 2016, I estimated the market at $770 million with LinkedIn Sales Navigator as the top vendor.  While new firms continue to enter, the top ten firms (now eight following the 2017 acquisitions of Avention and RainKing) earn seven of every eight dollars in the industry.

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.

The LinkedIn Market Share Section of the 2016 North American Sales Intelligence Market Sizing
The LinkedIn Market Share Section of the 2016 North American Sales Intelligence Market Sizing

I have also broken out two sub-categories: Predictive Analytics and Tech Sales Intelligence.  Predictive Analytics vendors continue to scuffle in the marketplace.  Last September, Gartner sized the global market at between $100 and $150 million.  I have gone back and forth on whether to include them in the larger sales intelligence space, but several of the sales intelligence vendors have added light predictive tools (e.g. Avention, DiscoverOrg, RainKing) while the predictive analytics companies have moved to add enrichment and provide more insights to sales reps.  As such, I see the two product categories moving towards each other so chose to include Lattice Engines, Leadspace, and similar firms.

The Tech Sales Intelligence category (e.g. DiscoverOrg, RainKing, Aberdeen, Corporate360) continues to show strong growth and makes up just over 15% of the market.  Both DiscoverOrg and RainKing have posted remarkable growth over the past few years and merged their efforts last month.  Post acquisition, they are the number three vendor in the space and may hit $120 million in 2017 revenue.  The new powerhouse has 4,000 customers and is looking to expand beyond technology sales to become a general purpose sales intelligence solution.

Acquiring RainKing should move DiscoverOrg well past Data.com (Salesforce) which will likely see declining 2017 revenue.  Salesforce has dropped the ball on Data.com.  They overpromised and under-delivered for years, relying on their ability to bundle the offering with other SFDC products.  As of last month, they are no longer able to deliver Dun & Bradstreet content (D&B WorldBase, Hoovers, and First Research) to new customers (legacy customers retain access).  Unless Data.com has a major content partner announcement at Dreamforce, it is likely to see significant revenue declines in 2017 and 2018 as customers switch to D&B Hoovers for Salesforce and other offerings.

Dun & Bradstreet re-established itself as the #2 vendor in the space with the January 2017 acquisition of Avention and the rebranding of Avention OneSource as D&B Hoovers.  Both companies have struggled to grow revenue with Avention growing slowly over the past few years and Hoovers declining.  However, infusing Avention products with Dun & Bradstreet content both reduces the underlying cost structure of Avention offerings and improves the depth and quality of the content.  Furthermore, Dun & Bradstreet has a much larger sales force which previously has lacked a credible global sales intelligence offering.  Hoovers classic generated nearly all of its revenue in the United States.  Over the next two years, expect to see significant revenue shift from Hoovers Classic to D&B Hoovers.

Three-Toed Sloth By Stefan Laube (Tauchgurke) - Public Domain.
Three-Toed Sloth By Stefan Laube (Tauchgurke) – Public Domain.

Finally, LinkedIn Sales Navigator has established itself as the clear number one vendor in market revenue.  The product didn’t exist five years ago and its competitors still tend to dismiss this gorilla in their midst.  How can they be missing the #1 vendor in the space?  Easy — the gorilla is well camouflaged and appears to be more of a three-toed sloth sleeping in the forest canopy.  Sales reps all use the freemium version of LinkedIn so give little thought to delve further when they ask “how are you obtaining your account intelligence today?” and the response is LinkedIn.  Thus, they enter LinkedIn as the competitor into their CRM, not Sales Navigator.  A few months later when they lose the opportunity, the rep then enters “no decision” into the CRM instead of recognizing a competitive loss.  I have been warning vendors in the space for years about this phenomenon, but they have failed to understand the threat of a gorilla that looks like a three-toed sloth.


N.B. Three-toed sloths inhabit Central and South America and gorillas Central Africa.  This is a metaphor.

 

 

 

Unomy Acquired by WeWork

Unomy B2B Prospecting spans 6M companies and 50M contacts.
Unomy supports both B2B company and contact prospecting

I was going to address the Unomy acquisition yesterday, but DiscoverOrg acquired RainKing so Unomy was bumped to today.  This is the fourth deal in the news this week (Moody’s acquisition of Bureau van Dijk closed at the beginning of the month and Zoominfo was acquired by PE company Great Hill Partners.

The WeWork acquisition of Unomy is an out of left field deal.  WeWork has been using Unomy for the past year to assist with their sales process.  The firm is looking to integrate Unomy into its workflows to improve both close rates and pipeline velocity for their co-working offices.  WeWork views Unomy as a key dataset for expanding enterprise sales.  While the firm provides office space for companies of all sizes, they would like to expand enterprise sales beyond 30% of their monthly revenue and 20% of their membership.

“Their B2B intelligence layer will be able to help us enrich our data sets when we’re driving sales in the enterprise market,” said WeWork SVP for Digital Product Ron Gura.

For WeWork, Unomy’s platform will become the backbone of our growing internal sales platform. The Unomy software will be integrated into WeWork’s current systems and the Unomy team – now part of our Sales & Marketing and Digital Products groups – will work with our enterprise sales team to help them go to market most effectively and improve their targeting capabilities, conversion rates, and productivity. More broadly, the Unomy team will also help streamline sales processes, build robust sales intelligence infrastructure, and close member prospects for our enterprise and regional sales teams around the world.

  • Ron Gura, WeWork SVP for Digital Product

WeWork will be retaining Unomy’s staff of twenty which will operate out of a Tel Aviv office.

WeWork did not indicate whether Unomy would be available to their tenants as a free or discounted service.  WeWork offers a services store to its tenants with over forty sales and marketing partners.  Amongst the firms with partnership discounts are Salesforce, CrunchBase, and RelPro.  However, WeWork does not plan on continuing the commercial product and will phase out the Unomy service, helping to transfer clients to other sales intelligence solutions.

Unomy’s database covers 17 million global companies and over 100 million executives.

News Alert: DiscoverOrg Acquires RainKing

DO plus RK

Marketing and Sales Intelligence vendor DiscoverOrg acquired RainKing on Friday and announced it this afternoon.  Both firms employ large editorial teams for building and maintaining company and contact datasets and technology platform details (e.g. vendors, products, project plans).  This is the second acquisition of a competitor by DiscoverOrg which bought iProfile two summers ago and quickly integrated iProfile’s international coverage into the DiscoverOrg universe.

According to Inc., RainKing posted 2016 revenue of $33.9 million, up $6.9 million.  Combined, the two firms had 2016 revenue of $88.3 million and a 160% three-year growth rate.  The combined firm has an Annual Recurring Revenue (ARR) in excess of $120 million.  DiscoverOrg’s 2016 end-of-year ARR was $71 million.

“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.”

  • DiscoverOrg CEO Henry Shuck

The plan is to immediately merge their coverage into a single database delivered via both platforms.  RainKing customers will benefit from deeper coverage of non-IT execs (e.g. sales, marketing, HR, product management), the assignment of Customer Success Managers to their accounts, and access to DiscoverOrg’s TiLT training for SDRs.  DiscoverOrg users will benefit from deeper company and contact coverage, particularly in Europe, along with a larger editorial team building out and maintaining the combined database.  Both groups of customers will benefit from additional datasets in the DiscoverOrg research pipeline including a new one which will be announced in the next sixty days.

RainKing customers will continue on their current platform for at least a year until RainKing functionality is merged with that of DiscoverOrg.

The combined datasets will span over two million contacts and over 100,000 global companies.  As both firms maintain high quality data standards, DiscoverOrg’s 95% accuracy guarantee will be maintained.

The deal is a cash transaction, though DiscoverOrg did not reveal the price.

Schuck provides additional details on his vision for DiscoverOrg and the acquisition in this YouTube video:

GZ Consulting Take

I have been tracking DiscoverOrg and its CEO Henry Schuck for over a decade.  For a long time, I viewed them as a niche offering in the tech space competing against three other firms of roughly the same size (RainKing, iProfile, and SalesQuest).  Due to competition and the cost of editorial resources, I figured they would plateau in their market coverage below that of the Hoover’s editorial dataset of 43,000 companies.  With more exacting editorial standards and three direct competitors, it was difficult to see how the marginal cost of adding and maintaining the 40,000th profile was less than the marginal revenue for the 40,000th profile (Microeconomics 101 would contend that the rational firm would keep building additional profiles until MC = MR).

But I made several errors in my assumptions.  Most importantly, I built in the additional cost of editorially maintained content without properly understanding the value of the data to clients, particularly as DiscoverOrg and RainKing extended their functionality into the marketing department and added light predictive tools such as ranking and scoring of prospects.  Adding marketing and integration tools greatly increased the value of every profile within their databases and allowed clients to distribute the cost of licenses over both sales and marketing departments.  The advent of Big Data and Predictive Analytics also increased the value of high quality company and contact data within CRMs and MAPs.

DiscoverOrg and RainKing quickly outgrew their other competitors resulting in the acquisition of SalesQuest by Avention and iProfile by DiscoverOrg.  While other firms have entered the IT profiling market, they either focus on technographics (e.g. Datanyze, BuiltWith, HG Data) or remain much smaller (e.g. Corporate360).

Finally, the growth of ABM and a focus on top accounts increases the value of a top company database with rich targeting variables such as tech platforms and projects.  “As the market continues to move toward account-based engagement built on a deep understanding of buying centers, investing in high quality data has become even more critical,” opined John Donlon, Sr. Research Director at SiriusDecisions.  “Simply relying on information scraped from the web is not enough to succeed, but leveraging human-verified sales and marketing intelligence gives organizations a distinct advantage in all aspects of revenue generation.”

Initially, the merger is a win-win for the 4,000 DiscoverOrg and RainKing clients, immediately providing deeper company, contact, and technology opportunity coverage for their 70,000 clients.  It also provides a runway from which DiscoverOrg can quickly grow its coverage including RainKing’s new Federal IT dataset.  According to the firm, “Our roadmap is focused on accelerated data collection, deeper practical predictive intelligence, enhanced account-based marketing capabilities, and seamless data optimization and enrichment in CRM, marketing automation, and sales engagement tools.”

While DiscoverOrg could use the merger as an opportunity to raise prices, my guess is that prices will remain stable so that DiscoverOrg can position itself to take on sales and marketing intelligence vendors such as D&B Hoovers, InsideView, LinkedIn Sales Navigator, and Zoominfo.  However, if DiscoverOrg is going to become the Salesforce of sales and marketing intelligence, the firm needs to expand its non-IT content beyond executives to include strategic company and industry intelligence.  It is through the marriage of best-in-class executive intelligence (emails, direct dials, responsibilities, bios, social links, and org charts) with financials, filings, news, industry overviews, and SWOTs that DiscoverOrg will be able to go mano a mano with Dun & Bradstreet and LinkedIn in the broader sales intelligence market.  Under this scenario, DiscoverOrg can continue to build out its best-in-class content set while licensing non-core content from other vendors.

This has been a year of significant M&A activity which has reduced the number of sales intelligence datasets on the market.  Beyond DiscoverOrg/RainKing, Avention was acquired by Dun & Bradstreet to become their new D&B Hoovers platform (Dun & Bradstreet content fueling Avention’s functionality and connectors), Moody’s purchased Bureau van Dijk, Zoominfo was bought by PE firm Great Hill Partners, and Unomy was picked up by co-working company WeWork.  The result is the phase out of the old Hoovers platform, uncertainty about Bureau van Dijk’s commitment to its Mint sales platform, and the withdrawal of Unomy and RainKing from the market (they will continue on in the near term, but are no longer being marketed).  The future of Data.com is also in question as Salesforce has failed to announce a path forward for their AppExchange solution now that Dun & Bradstreet content is no longer available to new clients.