BtoB Lead Alert with $50 million
Steve’s breakdown: Pipedrive, a CRM and sales tool, raises $50M to take on Salesforce and Microsoft. Timo Rein is the CEO and ex-salesman.
Here’s something you might want to mention to Timo: The very first line of copy in the very first video on their YouTube channel is incorrect. Holy Crap! (most people are not interested in what your selling)
NEW YORK, NY: While Salesforce and Microsoft have a dominant position in the world of sales software today, there are a number of startups nipping at their heels, and today one of the more promising of them has announced a growth round to help them in the effort. Pipedrive, a startup co-headquartered in Estonia and New York that offers tools to salespeople to help them close deals that are still in their pipeline, has picked up $50 million to expand its product, develop its business globally and potentially make acquisitions in the CRM space.
The Series C round was co-led by new investor Insight Venture Partners and Bessemer Venture Partners, with participation also from Rembrandt Venture Partners and Atomico (which itself has Estonian roots: Atomico’s founder, Niklas Zennstrom, was the co-founder of Skype, which developed and built the core IP voice and messaging product in the country). It brings the total raised by Pipedrive to $80 million.
Timo Rein, Pipedrive’s co-founder and CEO (and a former salesman himself), would not disclose the company’s valuation, saying only that it was “a pretty good round.” For some more context, Pitchbook writes that Pipedrive’s last funding, in 2016, valued the company at $188 million. Sources very close to the company tell us that the valuation now is $300 million+. (We’re asking around and will update this as and when we learn more.)
The CRM market is currently estimated to be worth over $40 billion, according to Gartner, and so unsurprisingly there are a number of startups in the fray, from those that are infusing the process with AI (such as Clari) through to other startups that help organise leads to act on them better (such as Zoho and Hubspot), through to those focusing on specific verticals like software companies (Paddle out of the UK).
Rein said that there was some skepticism when the company first launched that it would be possible to make a dent in landscape dominated by the likes of Salesforce and Microsoft.
“When we entered the market in 2010, people asked us, ‘Why build a product in an area where Salesforce is already strong?’ But having been in sales for more than a decade ourselves, we realized that it’s not just the sheer number of features you offer users. The difference is finding the right spot on the spectrum where you are getting what you need out of a product that you can use,” Rein said. “We have proven that users are migrating from Salesforce and others and are coming to Pipedrive. We definitely have less functionality, but professional salespeople know that performance is largely about your personality.”
In the case of Pipedrive, this translates to a software platform whose aim is to cut down on busywork to focus you on selling: all of your activity across emails and phone calls gets and other actions (it integrates some 100 other apps used in business, for example Google Apps, Trello, Zapier, MailChimp, Yesware and PandaDoc) is tracked without you needing to update the system, with the aim of making it easier for you to see what you might tackle next (and that gets tracked, too).
This is not about finding sales leads, Rein said: that may be something the company would consider down the line, but for now it’s looking at what happens when you already have a lead and need to make it as easy as possible to close that deal.
Ironically, Rein said that Pipedrive hasn’t been using its own tools in the majority of its own sales efforts. “In areas where we can use Pipedrive, we do,” he said, “but the service we offer is almost the opposite of what we built.” Pipedrive is priced on a monthly, SaaS basis ranging from $12.50 per user per month to $62.50 depending on number of users and features.
One way to think of Pipedrive’s approach is akin to something like Razer for the gaming world, which touts its ethos as “For Gamers. By Gamers.”
“Pipedrive is built primarily for salespeople, not just their managers,” said Teddie Wardi, a partner at Insight who also led the company’s Series B when he was still at Atomico. “This principle has helped them to create a product loved by users around the world, differentiate from competitors and propel the company to stellar growth.”
And that growth has come: today the company has 75,000 customers in 170 countries, with triple digital revenue growth each year since it first opened for business in 2010.
The plethora of startups in the market focusing on different aspects of the sales cycle and the CRM that surrounds that creates a ripe landscape not just for what Pipedrive might choose to tackle next, but how it might go about that.
“Post-sales, when you already have a customer and now need to help manage it, is an opportunity,” Rein said. “But our main effort and focus has been a product to help sales people deal with their pressure, and their own need to stay focused on the steady flow of sales, from the beginning to the actual close.”