Synthio, formerly known as Social123, closed on a $10.5 million equity round to expand its Customer Data Platform. The Series B round was led by Fulcrum Equity partners, bringing its total funding to $18.5 million. Other participants included current investors Vocap Investment Partners, Spinnaker VC Direct, LLC, Bahns Stanley, Stanley Partners, Ellis Capital, Buckhead Investments, the AIM Group, and Silicon Valley Bank. The round valued the firm at $33.5 million.
Synthio will be dedicating the funds towards platform and product enhancements along with “significantly” expanding their sales, marketing, and customer success teams.
Synthio is perfectly positioned to become the must-have solution for business-to-business enterprise marketers tasked with managing complex and rapidly changing customer data. The new funding allows us to continue investing in our unique ability to synthesize 1st and 3rd party data into the highest quality contact, firmographic, and technographic profiles. Our contact-centric approach to customer data is unique in the market and is an indispensable solution designed to address the major pain points hampering marketers’ productivity and performance.
Synthio CEO Aaron Biddar
Synthio emphasized the need for high quality data to fuel Marketing Automation Platforms and ABM campaigns.
“High quality leads and prospects are the mined gold on which companies spend fortunes and today’s marketers and sales professionals require that this data be in pristine condition,” said Jim Douglas, Partner at Fulcrum.
Synthio has over 200 active subscription customers and made the last two Inc. 5000 lists. According to Inc., the firm posted $2.8 million in revenue in 2015 with a 123% three-year Compound Average Growth Rate. The firm claims to have doubled their revenue in both 2015 and 2016.
Account Based Sales Development (ABSD) vendor Outreach announced a $30 million Series C round led by DJF. With the capital injection, Outreach raised its total funding to $60 million. The valuation was not disclosed. Other round participants included Four Rivers Group and existing investors Mayfield, MHS Capital, Microsoft Ventures and Trinity Ventures. Funds will be deployed towards additional product development, staffing, and marketing.
“The future of selling will be machines helping sales reps by removing the barriers of what bogs them down and empowering them to do their best work,” blogged Outreach CEO Manny Medina. “This round gives us the ability to make the required investments in machine learning and natural language processing. We’re doubling down in an area many in the market are talking about, but have yet to make a reality. With this investment, Outreach will continue to innovate to improve the day-to-day life of sales reps and their impact on the companies and communities they serve.”
Outreach helps automate, track, and analyze sales rep tasks across multiple communication channels including email, phone, and LinkedIn. Activities are tracked and synchronized with Salesforce, Gmail, and Exchange. Outreach supports over 1,200 sales teams including sales organizations at Adobe, Pandora, eBay, Marketo, and Zillow. The firm supports the efforts of over 15,000 sales reps.
Like many industries, technology is transforming sales from an art to a science. Sales is no longer about following up on inbound leads and hunting for a few big deals. It is about sales excellence – predictably executing the right selling activities at the right time.
Outreach CEO Manny Medina
The firm, founded in 2014, doubled its employment over the past year to 170. Outreach is looking to grow its product and engineering group from thirty to fifty staff before the end of 2017. Outreach is based in Seattle with offices in San Francisco and State College, PA. They recently opened an office in Tampa, Florida which has hired some of the talent from recently shuttered competitor KiteDesk.
While I have not heard the specific rationale behind the KiteDesk shutdown, a former CxO at the firm suggested that they lacked the capital to compete against well-funded competitors such as Outreach and SalesLoft.
Along with the funding round, Outreach announced that DFJ Growth Partner Sam Fort has been added to Outreach’s Board. “The opportunity for a platform that simplifies and automates the sales process is massive and we are thrilled to have Outreach join our portfolio,” said Fort.
Scott Brinker published the 2017 Marketing Technology Landscape, his annual exercise in shrinking thousands of logos into a super graphic. This year, the list grew 40%, to a total of 5,381 solutions (from 4,891 unique companies). Over the past year, 4.7% of the vendors were removed and 3.5% “changed in some fundamental way — their name, their focus, or their ownership.”
6.9% have at least 1,000 employees or are public. Brinker describes these 300+ firms as enterprises.
44.2% are private businesses with either fewer than 1,000 employees or no funding data
48.8% are investor-funded startups at any pre-exit stage
“So for those who assumed most of these companies are tiny, it’s worth noting that over 300 are enterprises of significant scale,” said Brinker. “It’s also true that over 2,300 others have received some sort of investor funding — which implies scale beyond a couple of rogue developers in a garage (or, for a more modern-day cliché, two people in a coffee shop).”
The bottom group of “investor funded startups at any pre-exit stage,” which makes up nearly half the firms, is a growing phenomenon in the SaaS universe. Analyst Clement Vouillon of Point Nine Capital said that ten years ago, there were few SaaS companies that weren’t looking for VC-funding. Growth in self-funded SaaS ventures has been fed by a growth in underlying platforms and advice. Thus, “building and distributing a SaaS product is easier, faster and less expensive.”
Vouillon noted a number of additional reasons for self-funded bootstrappers:
Experienced founders have previously worked at VC-backed firms and are looking to avoid the model.
Competition prevents firms from scaling but permit the firm to operate as “a lean and profitable SaaS business.”
The SaaS firm is a feature that can operate on SaaS platforms (vs. being a full product).
The firm’s total addressable market (TAM) is not large enough to attract VC funds, but is sufficient to permit profitability.
The firm is local but not easily scalable.
“The majority of these companies have their sweet spot in the tens to hundreds [of] thousands dollars of MRR,” said Vouillon. “Once reached they’ll continue to grow but more slowly and they won’t scale to millions dollars of MRR.”
The spectacular scope explosion of marketing — and the rate at which new disruptions and innovations continue to roil marketing and business at large — has made it impossible for any one vendor to deliver everything that every marketer needs in a digital world. Almost all of the major providers now acknowledge this, and they’ve shifted their strategies to embrace the ecosystem — becoming true “platforms” that make it easier for marketers to plug in a variety of more specialized and vertical solutions.
Scott Brinker, Editor of ChiefMartec.com
Many of the firms covered in this blog are located in the Audience/Market Data and Data Enhancement section. This group includes predictive analytics companies, tech data vendors, DaaS hygiene, and alerting companies.
Other groupings with covered firms in this newsletter include ABM; Predictive Analytics; and Sales Automation, Enablement & Intelligence.
Last week was a busy week for VC funding in the SalesTech space. Yesterday, I covered SparkLane’s funding round and today I am blogging about PE/VC database Crunchbase which announced an $18 million Series B led by Mayfield. The funding announcement was paired with the launch of a new team-based Crunchbase Enterprise service. Crunchbase was spun out of AOL in 2015 with $6.5 million in funding from Emergence Capital followed by a smaller $2 million round. Crunchbase also laid out plans for a Crunchbase Marketplace that would allow the company to become the “Facebook of company information.”
The new funds will be dedicated towards extending its SaaS offerings, expanding its database, and growing its teams with a “significant commitment to diversity.”
“Mayfield is excited to partner with Jager McConnell and the team at Crunchbase to be the place where consumers, professionals, and businesses can easily access the information on companies to sell to, market to, partner with, finance, work for, research, acquire, and do business with. The early success of Crunchbase Pro and its usability have given us a view into the ambitious vision and roadmap of increasing the breadth, depth, and accessibility of the high-quality data platform Crunchbase is creating,” commented Rajeev Batra, Partner at Mayfield. “Crunchbase not only has a globally dominant position and brand, it has the potential to be a true platform company in becoming the actionable master record for company data.”
Crunchbase now offers an API along with three levels of service: free, Pro ($29 / month), and Enterprise ($99 / user / month with a minimum of five users). Additional services are in the pipeline.
The free service receives 2.3 million unique visitors per month of which 40% of site traffic is international. Pro, which was launched last September, is “well past” 5,000 subscribers according to CEO Jager McConnell. The firm has licensed its API to more than ten partners including Glassdoor and SimilarWeb.
The new Enterprise service combines Pro with API access, list downloads, email addresses, phone support, and a CRM connector. The AppExchange service supports daily Crunchbase updates and data change alerts.
Crunchbase now covers a half million companies and 2,700 VC firms. Other content includes investors, people, events, and products. Data is maintained by a team of editors with updates provided to Crunchbase by their member community. The database also benefits from VC firm updates and machine learning tools which search for anomalous information. Annually, five million updates are made to the database.
Crunchbase has become the go-to destination for accurate and up-to-date company information for businesses all over the world,” said McConnell. “As we grow, hiring a diverse team will bring a variety of valuable perspectives into the business, which reflects the culture of Crunchbase. This will remain a focus of hiring as the company doubles in size in the next year.”
Crunchbase clients include Affinity, Datafox, Datanyze, Deloitte, Engagio, Everstring, Infer, Microsoft, Nestle, Samsung, Slack, Target, Volkswagen, and IBM Watson. The firm has forty staff of which 43% are women and half are non-white.
McConnell wants Crunchbase to be the Facebook of company information. “The premise is: it would be impossible for a single company to find all these slivers of company information, and put it into one spot on their own. They can’t be all those core competencies, so the idea is, let’s go and form these partnerships with all these companies that have those core competencies, put it in one place and, if we do a good job here, the user will say, ‘I know where to go, it’s where all this data comes together, that’s at Crunchbase.’”
To accomplish this vision, Crunchbase is readying a Crunchbase Marketplace of fifteen to twenty partners “to build a true company master record.” Thus, Glassdoor would provide CEO ratings, employee ratings, and available jobs while SimilarWeb would feature website traffic for a specific company or industry.
Users will have the ability to select which content sets display. The goal is to cover all of the companies on the Internet.
“Over time, pretty much every data provider that has some slice of company information, we’d like our users to have the ability to go and add that data directly into their experience. Sometimes that will be free, like Glassdoor will be a free dataset, but other times it may even cost a little bit of money to go add in technology stack data, or patent data,” said McConnell. “Sometimes people want to know not just about funding, but about jobs, the CEO or all the companies in their geography that have a certain amount of website traffic. Or sales reps want to find people who use a competitive product. Right now, they need three partners to get all that data. We want to let you choose it as part of the experience.”
David Sternis of Deloitte said, “The quality and accessibility of Crunchbase data is second to none. We save an immense amount of time by using Crunchbase Enterprise to power our TechHabor solution in order to stay on top of the innovation and startup landscapes. Our teams spend a fraction of the time they used to on research and market analysis and can prioritize focusing on providing strategic recommendations for our clients.”
Note: While Crunchbase and CB Insights both cover the PE/VC space, they are separate, non-affiliated companies.
Sparklane, which describes itself as “a publisher of sales intelligence SAAS solutions,” announced that it received a €4m funding round from XAnge and Entrepreneur Venture Investment Fund. The round raised its total funding to €7m. XAnge also participated in Sparklane’s previous funding round.
“We were won over by Sparklane’s disruptive positioning and the impressive performance of its management team, prompting us to offer them our renewed support as we participate in this fundraising initiative alongside Entrepreneur Venture,” stated Guilhem de Vregille, Deputy Director of XAnge.
The round allows Sparklane to continue its European expansion. The French company established itself in the UK in 2016 and is currently eyeing the German market. The funding will also be directed towards expanding its artificial intelligence capabilities, and growth in their sales and R&D teams.
According to Chairman Frédéric Pichard, the funding round is a “real vote of confidence,” in the company. “Our goal remains the same: to help marketing and sales people identify their future customers more quickly using Artificial Intelligence.”
Sparklane offers predictive lead scoring and prospecting tools for sales and marketing teams in the UK and France. Their Predict platform processes client CRM data to define an Ideal Customer Profile (ICP), apply predictive lead scores, and identify look-a-like prospects.
Sparklane supports nearly 350 clients across banking, insurance, technology and business services. The firm was listed in Deloitte’s 2016 EMEA Fast 500 list of technology companies with 265% revenue growth between 2012 and 2015 (three-year CAGR of 54%).
Since yesterday I discussed SalesLoft’s funding round, I would be remiss to note that Predictive Analytics vendor InsideSales closed on a $50 million funding round which included Microsoft and the Irish government. In total, the company has raised over $250 million. The latest round, led by Polaris Capital, included Questmark Partners and the Irish Strategic Investment Fund. Also participating were existing investors Microsoft, Kleiner Perkins Caufield Byers, Hummer Winblad, U.S. Venture Partners, Epic Ventures and Zetta Venture. The latest round was flat or nominally up, allowing the firm to retain its Unicorn status.
InsideSales’ predictive Accelerate service combines predictive analytics with a phone dialer, sales gamification, and email and web interaction tracking within SFDC. Accelerate lists at $295 per user per month. An Essentials service, designed for SMBs, is priced at $25 per seat per month. The firm also offers products at several price points in between.
The company stores, anonymous, aggregated data. “We have over 120 million unique buying personas,” said CEO David Elkington. “More interestingly, I have almost a hundred billion sales interactions with those 120 million people. A sales interaction’s a conversation, an email, a response, a visit, a purchase. We’re adding roughly five billion of those a month. The reason is because it’s aggregate, it’s crowdsourced.”
Elkington emphasizes the value of data over algorithms. “We’re basically looking at the way categories of people behave within various different situations. The mistake people are making is thinking the value is in building the best algorithm. The key is in the data.”
Elkington observed a “generational transition” in sales leadership with millennials “becoming predominant quota carrying reps, taking more sales leadership roles.”
In 2015, InsideSales set out to study the “buying and selling patterns of the next generation of employees.” The firm found that over the past few years, the presence of millennials amongst buyers and sellers has nearly doubled “and their behavior is very different.”
“The way a millennial runs their day is fundamentally different than the way other generations run their day,” noted Elkington. “Millennials don’t want to sit down in their CRM. They live all over the web and move around quite a bit.”
Based on these observations, InsideSales recently released Playbooks, a browser plugin which helps sales reps “prospect, prioritize and connect without juggling multiple tools.” The Playbooks service also supports CRM synchronization and integrated telephony and emails.
InsideSales research found that the typical millennial has seventy to eighty tabs open at a time. Thus, Playbooks allows the user to leverage the intelligence in each of those tabs and immediately act on the information.
InsideSales is finding strong usage for Playbooks amongst millennials. “Reps adopt it much faster with much less training, and satisfaction seems to be higher,” said Elkington.
InsideSales has over 2,000 customers including ADP, Groupon, and Microsoft. The firm currently employs a staff of 500 located in the “Silicon Slopes” of Utah with an outpost in San Mateo.
“Our mission is to leverage big data and cloud capabilities to unlock human potential through predictive analytics and machine learning,” said Elkington. “We are building an Amazon-style recommendation engine for business — a system capable of intelligently analyzing billions of data points in real-time and recommending the optimal next steps for almost any application or business process. This lays the groundwork for a future where predictive technology can be applied, not just to sales organizations but also to government, healthcare, retail and beyond.”
Last month, Account Based Sales Engagement vendor SalesLoft closed on a $15M Round B twenty-two months after closing on a $10.15M Series A. The new round, which valued the firm at $100 million, was led by David Cummings, the founder of Pardot, and his Atlanta Ventures. SalesLoft chose to work with its existing Atlanta-based investor team. Cummings chipped in $10 million with Spinnaker Investments and Emergence Capital contributing their pro-rata shares.
By extending Round B amongst current investors, SalesLoft was able to “keep our board the same, move fast to close, and get back to the work of serving our customers immediately,” said CEO Kyle Porter.
Heading into the new year, our growth left us with enough cash in the bank and a modest enough burn rate to keep running for the next few years. But we’re on a mission to transform the sales industry and be the clear No. 1 in our category. Achieving that mission requires additional investment in the platform, innovation, and our community so we deliver significant value to our customers. For that reason, we decided it was time to double down on our market and put more capital to work.
CEO Kyle Porter
The round and funding strategy were proposed by Cummings. “David [Cummings] is a close friend, mentor, investor, board member, and advisor who has been on the journey with SalesLoft since the very beginning,” said Porter. “David’s career journey had imprinted on him the value in being a market leader and he recognized the magnitude of the sales engagement opportunity.”
While the firm’s burn rate was low enough to hold off on another round for a few years, “we’re on a mission to transform the sales industry and be the clear #1 in our category,” blogged Porter. “Achieving that mission requires additional investment in the platform, innovation, and our community so we deliver significant value to our customers. For that reason, we decided it was time to double down on our market and put more capital to work.”
SalesLoft maintains a level of transparency that exceeds most companies with detailed discussions around funding, corporate culture, and product strategy. While most companies provide pro-forma press releases around funding announcements, SalesLoft CEO Kyle Porter wrote detailed blogs around both rounds and presented a case study on his decision to abandon SalesLoft’s successful Prospector service while Cadence was still in its formative stage.
The funding will be used towards product, marketing, and opening an office in San Francisco. The 2017 product focus includes improved orchestration between sales, marketing, and supporting executives; enhanced insights and reports; expanded governance tools; role based workflow assignments; and enhanced analytics. Furthermore, “SalesLoft will be at your fingertips at all times, delivering core applications to wherever your reps live in everyday, like Gmail, Outlook, Dynamics, and Salesforce.”
SalesLoft plans to continued expansion of its ecosystem which already includes a broad set of partners:
Although they did not detail their 2017 partner list, the firm named Vidyard and DocSend as 2017 connectors when I was profiling their service for my book. Vidyard provides video integration into emails with the customer service rep option to record a quick intro. DocSend provides intra-document tracking tools and analytics which display information on what sections were viewed and for how long.
In 2016, SalesLoft trebled its Annualized Run Rate (ARR) while phasing out its $4 million Prospector Service and expanding the Cadence account based sales offering. Over this time, the Cadence product increased its ARR by 5,000 percent (from less than $200, 000). Cadence now has over 1,000 customers.
SalesLoft has grown from 5 employees in early 2014 to 125 with plans to add 85 headcount in the coming months.
The firm is focused on “serving the customer,” said Porter. “It was our intention to build a company based entirely on a set of core values and to this date, it’s been the best decision we’ve ever made.”
Porter lists the firms core values as
Put Customers First
Focus on Results
Glass Half Full
Bias Toward Action
Team over Self
Focusing on values allows us to be intentional about our behavior on a daily basis. This sets the foundation for healthy teams to establish trust, inspire growth, and achieve something special together.
CEO Kyle Porter
While many companies view culture as corporate window dressing around perks and office space, SalesLoft COO Rob Forman defines culture as “our values, consistently applied.”