Outreach Inc., a software maker that helps to automate essential, but mundane work for salespeople and help them compete in a world of self-service B2B e-commerce, crossed the billion-dollar valuation threshold—joining the rapidly expanding club of unicorn startups.
Outreach is now worth $1.1 billion after raising $114 million in a funding round led by Lone Pine Capital, the Seattle-based company said Tuesday. Meritech Capital Partners and Lemonade Capital also invested in the round, as well as Microsoft Corp.’s venture capital arm called M12, DFJ Growth, Mayfield, Sapphire Ventures, Spark Capital and Trinity Ventures. The latest brings Outreach’s total fundraising to $239 million.
Outreach said the funding round made it the first unicorn, a startup with a value of at least $1 billion, in the sales-engagement market—a type of software that tracks and automates communication in the sales process. The aim is to understand which prospective customers are interested, which aren’t, and how you can change their minds.
Forrester Research Inc., in a report on new sales technologies, says Outreach is among a new breed of software vendors out to help sales teams become more digital to better engage customers in a world of digital commerce.
“Specifically, always available commerce and intelligent guided-selling solutions erode field sales teams, while inside sales teams—formerly the bottom rung—handle more considered purchases,” Forrester says in the report, “The Forrester Tech Tide: Sales Technologies, Q4 2018.” “This has led to a boom in sales technology innovation, as vendors seek to arm these new digital salespeople. It’s not enough to embrace consultative selling; sellers must effectively use technology to apply this new skillset when and where their customers require them. They must quickly respond to customers over digital channels while injecting insights to fuel more personalized engagement and move the sales process forward.”
Manny Medina, Outreach’s CEO, said in an interview, “Sales engagement is a very hot category so sales teams are realizing they need software for their actions.” The company expects to reach an annualized sales rate of $100 million within the next year, he added.
Outreach will use the new investment to make sure it can integrate with all communication channels, bolster engineering efforts and expand internationally, starting with English-speaking countries, Medina said. The company will also try to boost the number of partnerships to grow its customer base.
Amid an explosion in cloud-computing companies eager to sell corporations their software, Outreach helps existing customers Adobe Inc., Okta Inc., Zendesk Inc. and DocuSign Inc. make their sales teams more productive.
“We want to focus on mission-critical applications—the painkillers, not the vitamins; the must-haves, not the nice-to-haves,’’says George Bischof, a managing director at Meritech. “With Outreach, the engagement at the user level is so strong.’’
Outreach already connects to clients’ Microsoft and Salesforce.com Inc. software for managing customer relationships, and expects to integrate with SAP SE by the end of the year, Medina said. Salesforce’s CRM platform directly integrates with its Commerce Cloud software, including the formerly named CloudCraze B2B ecommerce software and Demandware retail ecommerce software.
There were more than 300 unicorn companies as of January, according to CB Insights.Favorite