While people believe that the tech world is in a bubble that is bound to pop soon, the investment climate for enterprise startups with good traction remains hot. In the latest development, InsideSales.com, a provider of predictive analytics services for salespeople to help them source and close deals, has raised another $60 million of funding.
This latest round, which brings the total raised to just over $200 million, values InsideSales.com at “north of $1 billion,” CEO Dave Elkington told TechCrunch.
The investment comes less than a year after InsideSales.com raised $100 million, and is specifically aimed at growing its customer base: the round is led by Saleforce Ventures with participation from new investor Microsoft.
Both are acting as strategic backers. “We will increase support for the Salesforce and Microsoft platforms, expand our reach and ability to serve larger enterprise customers and fuel international expansion for our company,” Elkington said. Other investors in this round include Polaris Partners, Kleiner Perkins Caufield Byers, Hummer Winblad, U.S. Venture Partners and Zetta Venture Partners.
InsideSales — founded in Utah in 2004 — is notable in that it took almost no funding at all in its first six years of growth (save for $10,000-20,000 invested by Elkington’s mother-in-law).
The Series C raised last year speaks to the gear shift that the company has undergone in the last four years. That round was notable because of the extreme competitiveness behind it — apparently at least 25 investors wanted in, and 8 ended up investing, led by Polaris Partners.
Yes, the market for startup investments may be hot, but the specific attraction in enterprise startups seems to be for those that are tackling the business market successfully (witness rapid fundraising from Slack as another testament to this, or yesterday’s additional $65 million for BI firm Birst).
“Salesforce Ventures invests in the next generation of enterprise cloud technology to help companies connect with their customers in entirely new ways,” said John Somorjai, EVP of corporate development and Salesforce Ventures, in a statement on today’s news. “InsideSales.com’s sales acceleration platform extends the power of the Salesforce Platform by applying data science to the sales process to help companies sell more.”
Elkington tells me that the competitive pattern was repeated in this latest round, too.
“InsideSales.com had the opportunity to raise more in this round but wanted to take a selective, strategic approach,” he said. Following that Series C round of funding, the company doubled its employees to 600 “while sustaining very strong revenue growth.”
He said the company has also doubled its customer base in the same time, to now more than 2,000 companies including ADP, Sprint, Fidelity, Microsoft itself, Groupon and Marketo. It plans on adding another 300-400 staff this year.
In the rise of big data analytics, there are a lot of other predictive sales tools on the market such as Clari, 6Sense, Infer, RapidMiner and Stitch (which was recently acquired by SugarCRM).
Elkington tells me that InsideSales is different in part because of the size of the data pool that it taps to provide suggestions to its customers. More than 14 billion sales interactions are crunched in Neuralytics, InsideSales’ big data-fuelled sales platform, which provides both predictive and prescriptive suggestions to users.
In other words, it tells you what you might like to do, but also what you should specifically do, to close a deal. “It not only identifies the best leads, prospects and opportunities but also offer actionable results including how to best contact sales leads and even which words to say to contact more leads and close more sales,” Elkington said.
While companies like Salesforce have gone well beyond their name to cover more than just sales business functions as part of its platform, InsideSales appears to be happy to focus just on this particular vertical for now.
“There are thousands of variables that impact both the probability to close sales and the probability to contact sales leads,” Elkington noted.
The company was has been known for using variables such as phases of the moon, sports team victories and weather among its, in Elkington’s words, “more colorful factors” for crunching data and coming up with insights, “but there are plenty of others that are more impactful overall to increase sales effectiveness for our clients.” These include what type of company the prospect is from, what role the prospect has in the organization and what behaviors the prospect has demonstrated.
The money may also go toward acquisitions, Elkington said, but it is still too early to consider what InsideSales’ own exit strategy may be.
“The opportunity is still in the early stages,” he said. “We are building the team and technology for the long term and see tremendous opportunity to move more deeply into the enterprise and expand internationally. If and when we see targets that accelerate our strategy and can accelerate sales for our customers, strategic acquisitions will be part of our growth plan as we create a broad platform experience.”
