DataRails books $25M more to build better financial reporting tools for SMBs

As enterprise startups continue to target interesting gaps in the market, we’re seeing increasingly sophisticated tools getting built for small and medium businesses — traditionally a tricky segment to sell to, too small for large enterprise tools, and too advanced in their needs for consumer products. In the latest development of that trend, an Israeli startup called DataRails has raised $25 million to continue building out a platform that lets SMBs using Excel to run financial planning and analytics like their larger counterparts.

The funding closes out the company’s Series A at $43.5 million, after the company initially raised $18.5 million in April (some at the time reported this as its Series A, but it seems the round had yet to be completed). The full round includes Zeev Ventures, Vertex Ventures Israel, and Innovation Endeavors, with Vintage Investment Partners added in this most recent tranche. DataRails is not disclosing its valuation, except to note that it has doubled in the last four months, with hundreds of customers and on target to cross 1,000 this year, with a focus on the North American market. It has raised $55 million in total. 

The challenge that DataRails has identified is that on one hand, SMBs have started to adopt a lot more apps, including software delivered as a service, to help them manage their businesses — a trend that has been accelerated in the last year with the pandemic and the knock-on effect that has had for remote working and bringing more virtual elements to replace face-to-face interactions. Those apps can include Salesforce, NetSuite, Sage, SAP, QuickBooks, Zuora, Xero, ADP and more.

But on the other hand, those in the business who manage its finances and financial reporting are lacking the tools to look at the data from these different apps in a holistic way. While Excel is a default application for many of them, they are simply reading lots of individual spreadsheets rather than integrated data analytics based on the numbers.

DataRails has built a platform that can read the reported information, which typically already lives in Excel spreadsheets, and automatically translate it into a bigger picture view of the company.

For SMEs, Excel is such a central piece of software, yet such a pain point for its lack of extensibility and function, that this predicament was actually the germination of starting DataRails in the first place,

Didi Gurfinkel, the CEO who co-founded the company with Eyal Cohen (the CPO) said that DataRails’ initially set out to create a more general purpose product that could help analyze and visualize anything from Excel.

“We started the company with a vision to save the world from Excel spreadsheets,” he said, by taking them and helping to connect the data contained within them to a structured database. “The core of our technology knows how to take unstructured data and map that to a central database.” Before 2020, DataRails (which was founded in 2015) applied this to a variety of areas with a focus on banks, insurance companies, compliance and data integrity.

Over time, it could see a very specific application emerging, specifically for SMEs: providing a platform for FP&A (financial planning and analytics), which didn’t really have a solution to address it at the time. “So we enabled that to beat the market.”

“They’re already investing so much time and money in their software, but they still don’t have analytics and insight,” said Gurfinkel.

That turned out to be fortunate timing, since “digital transformation” and getting more out of one’s data was really starting to get traction in the world of business, specifically in the world of SMEs, and CFOs and other people who oversaw finances were already looking for something like this.

The typical DataRails customer might be as small as a business of 50 people, or as big as 1,000 employees, a size of business that is too small for enterprise solutions, “which can cost tens of thousands of dollars to implement and use,” added Cohen, among other challenges. But as with so many of the apps that are being built today to address those using Excel, the idea with DataRails is low-code or even more specifically no-code, which means “no IT in the loop,” he said.

“That’s why we are so successful,” he said. “We are crossing the barrier and making our solution easy to use.”

The company doesn’t have a huge number of competitors today, either, although companies like Cube (which also recently raised some money) are among them. And others like Stripe, while currently not focussing on FP&A, have most definitely been expanding the tools that it is providing to businesses as part of their bigger play to manage payments and subsequently other processes related to financial activity, so perhaps it, or others like it, might at some point become competitors in this space as well.

In the meantime, Gurfinkel said that other areas that DataRails is likely to expand to cover alongside FP&A are likely to include HR, inventory, and “planning for anything,” any process that you have running in Excel. Another interesting turn would be how and if DataRails decides to look beyond Excel at other spreadsheets, or bypass spreadsheets altogether.

The scope of the opportunity — in the U.S. alone there are more than 30 million small businesses — is what’s attracting the investment here.

“We’re thrilled to reinvest in DataRails and continue working with the team to help them navigate their recent explosive and rapid growth,” said Yanai Oron, General Partner at Vertex Ventures, in a statement. “With innovative yet accessible technology and a tremendous untapped market opportunity, DataRails is primed to scale and become the leading FP&A solution for SMEs everywhere.”

“Businesses are constantly about to start, in the midst of, or have just finished a round of financial reporting—it’s a never-ending cycle,” added Oren Zeev, founding partner at Zeev Ventures. “But with DataRails, FP&A can be simple, streamlined, and effective, and that’s a vision we’ll back again and again.”

CEO Shishir Mehrotra and investor S. Somasegar reveal what sings in Coda’s pitch doc

Coda entered the market with an ambitious, but simple, mission. Since launching in 2014, it has seemingly forged a path to realizing its vision with $140 million in funding and 25,000 teams across the globe using the platform.

Coda is simple in that its focus is on the document, one of the oldest content formats/tools on the internet, and indeed in the history of software. Its ambition lies in the fact that there are massive incumbents in this space, like Google and Microsoft.

Co-founder and CEO Shishir Mehrotra told TechCrunch that that level of competition wasn’t a hindrance, mainly because the company was very good at communicating its value and building highly effective flywheels for growth.

Mehrotra was generous enough to let us take a look through his pitch doc (not deck!) on a recent episode of Extra Crunch Live, diving not only into the factors that have made Coda successful, but how he communicated those factors to investors.

Coda Pitch Doc

A screenshot from Coda’s pitch doc.

Extra Crunch Live also features the ECL Pitch-off, where founders in the audience come “onstage” to pitch their products to our guests. Mehrotra and his investor, Madrona partner S. Somasegar, gave their live feedback on pitches from the audience, which you can check out in the video (full conversation and pitch-off) below.

As a reminder, Extra Crunch Live takes place every Wednesday at 3 p.m. EDT/noon PDT. Anyone can hang out during the episode (which includes networking with other attendees), but access to past episodes is reserved exclusively for Extra Crunch members. Join here.

The soft circle

Like many investors and founders, Mehrotra and Somasegar met well before Mehrotra was working on his own project. They met when both of them worked at Microsoft and maintained a relationship while Mehrotra was at Google.

In their earliest time together, the conversations centered around advice on the Seattle tech ecosystem or on working with a particular team at Microsoft.

“Many people will tell you building relationships with investors … you want to do it outside of a fundraise as much as possible,” said Mehrotra.

Eventually, Mehrotra got to work on Coda and kept in touch with Somasegar. He even pitched him for Series B fundraising — and ultimately got a no. But the relationship persisted.

How to launch a successful RPA initiative

Robotic process automation (RPA) is rapidly moving beyond the early adoption phase across verticals. Automating just basic workflow processes has resulted in such tremendous efficiency improvements and cost savings that businesses are adapting automation at scale and across the enterprise.

While there is a technical component to robotic automation, RPA is not a traditional IT-driven solution. It is, however, still important to align the business and IT processes around RPA. Adapting business automation for the enterprise should be approached as a business solution that happens to require some technical support.

A strong working relationship between the CFO and CIO will go a long way in getting IT behind, and in support of, the initiative rather than in front of it.

A strong working relationship between the CFO and CIO will go a long way in getting IT behind, and in support of, the initiative rather than in front of it.

More important to the success of a large-scale RPA initiative is support from senior business executives across all lines of business and at every step of the project, with clear communications and an advocacy plan all the way down to LOB managers and employees.

As we’ve seen in real-world examples, successful campaigns for deploying automation at scale require a systematic approach to developing a vision, gathering stakeholder and employee buy-in, identifying use cases, building a center of excellence (CoE) and establishing a governance model.

Create an overarching vision

Your strategy should include defining measurable, strategic objectives. Identify strategic areas that benefit most from automation, such as the supply chain, call centers, AP or revenue cycle, and start with obvious areas where business sees delays due to manual workflow processes. Remember, the goal is not to replace employees; you’re aiming to speed up processes, reduce errors, increase efficiencies and let your employees focus on higher value tasks.

Transform launches with $24.5M in funding for a tool to query and build metrics out of data troves

The biggest tech companies have put a lot of time and money into building tools and platforms for their data science teams and those who work with them to glean insights and metrics out of the masses of data that their companies produce: how a company is performing, how a new feature is working, when something is broken, or when something might be selling well (and why) are all things you can figure out if you know how to read the data.

Now, three alums that worked with data in the world of Big Tech have founded a startup that aims to build a “metrics store” so that the rest of the enterprise world — much of which lacks the resources to build tools like this from scratch — can easily use metrics to figure things out like this, too.

Transform, as the startup is called, is coming out of stealth today, and it’s doing so with an impressive amount of early backing — a sign not just of investor confidence in these particular founders, but also the recognition that there is a gap in the market for, as the company describes it, a “single source of truth for business data” that could be usefully filled.

The company is announcing that it has closed, while in stealth, a Series A of $20 million, and an earlier seed round of $4.5 million — both led by Index Ventures and Redpoint Ventures. The seed, the company said, also had dozens of angel investors, with the list including Elad Gil of Color Genomics, Lenny Rachitsky of Airbnb and Cristina Cordova of Notion.

The big breakthrough that Transform has made is that it’s built a metrics engine that a company can apply to its structured data — a tool similar to what Big Tech companies have built for their own use, but that hasn’t really been created (at least until now) for others who are not those Big Tech companies to use, too.

Transform can work with vast troves of data from the warehouse, or data that is being tracked in real time, to generate insights and analytics about different actions around a company’s products. Transform can be used and queried by nontechnical people who still have to deal with data, Handel said.

The impetus for building the product came to Nick Handel, James Mayfield and Paul Yang — respectively Transform’s CEO, COO and software engineer — when they all worked together at Airbnb (previously Mayfield and Yang were also at Facebook together) in a mix of roles that included product management and engineering.

There, they could see firsthand both the promise that data held for helping make decisions around a product, or for measuring how something is used, or to plan future features, but also the demands of harnessing it to work, and getting everyone on the same page to do so.

“There is a growing trend among tech companies to test every single feature, every single iteration of whatever. And so as a part of that, we built this tool [at Airbnb] that basically allowed you to define the various metrics that you wanted to track to understand your experiment,” Handel recalled in an interview. “But you also want to understand so many other things like, how many people are searching for listings in certain areas? How many people are instantly booking those listings? Are they contacting customer service, are they having trust and safety issues?” The tool Airbnb built was Minerva, optimised specifically for the kinds of questions Airbnb might typically have for its own data.

“By locking down all of the definitions for the metrics, you could basically have a data engineering team, a centralized data infrastructure team, do all the calculation for these metrics, and then serve those to the data scientists to then go in and do kind of deeper, more interesting work, because they weren’t bogged down in calculating those metrics over and over,” he continued. This platform evolved within Airbnb. “We were really inspired by some of the early work that we saw happen on this tool.”

The issue is that not every company is built to, well, build tools like these tailored to whatever their own business interests might be.

“There’s a handful of companies who do similar things in the metrics space,” Mayfield said, “really top flight companies like LinkedIn, Airbnb and Uber. They have really started to invest in metrics. But it’s only those companies that can devote teams of eight or 10, engineers, designers who can build those things in house. And I think that was probably, you know, a big part of the impetus for wanting to start this company was to say, not every organization is going to be able to devote eight or 10 engineers to building this metrics tool.”

And the other issue is that metrics have become an increasingly important — maybe the most important — lever for decision making in the world of product design and wider business strategy for a tech (and maybe by default, any) company.

We have moved away from “move fast and break things.” Instead, we now embrace — as Mayfield put it — “If you can’t measure it, you can’t move it.”

Transform is built around three basic priorities, Handel said.

The first of these has to do with collective ownership of metrics: by building a single framework for measuring these and identifying them, their theory is that it’s easier for a company to all get on the same page with using them. The second of these is to use Transform to simply make the work of the data team more efficient and easier, by turning the most repetitive parts of extracting insights into automated scripts that can be used and reused, giving the data team the ability to spend more time analyzing the data rather than just building data sets. And third of all, to provide customers with APIs that they can use to embed the metric-extracting tools into other applications, whether in business intelligence or elsewhere.

The three products it’s introducing today, called Metrics Framework, Metrics Catalog and Metrics API, follow from these principles.

Transform is only really launching publicly today, but Handel said that it’s already working with a small handful of customers (unnamed) in a small beta, enough to be confident that what it’s built works as it was intended. The funding will be used to continue building out the product as well as bring on more talent and hopefully onboard more businesses to using it.

Hopefully might be less a tenuous word than its investors would use, convinced that it’s filling a strong need in the market.

“Transform is filling a critical gap within the industry. Just as we invested in Looker early on for its innovative approach to business intelligence, Transform takes it one step further by providing a powerful yet streamlined single source of truth for metrics,” said Tomasz Tunguz, MD, Redpoint Ventures, in a statement.

“We’ve seen companies across the globe struggle to make sense of endless data sources or turn them into actionable, trusted metrics. We invested in Transform because they’ve developed an elegant solution to this problem that will change how companies think about their data,” added Shardul Shah, a partner at Index Ventures.

Gusto makes first acquisition, buying Ardius to expand into R&D tax credits

Free money from the government sounds like winning the lottery, but the reality is that most tech startups and even local retail businesses and restaurants can potentially qualify for tax credits related to research and development in the United States. Those credits, which is what helps tech giants keep their tax rates to near zero, are hard for smaller companies to receive because of extensive documentation requirements and potential audit costs.

So a number of startups have been launched to solve that gap, and now, larger companies are entering the fray as well.

Gusto, which started off with payroll for SMBs and has since expanded into employee on-boarding, insurance, benefits, and other HR offerings, today announced that it is acquiring Ardius, a startup designed to automate tax compliance particularly around R&D tax credits.

The Los Angeles-based company was founded by Joshua Lee in 2018, who previously had worked for more than a decade at accounting firm EY. Terms of the deal were not disclosed, and Ardius will run as an independent business with the entire team transitioning to Gusto.

The strategy here is simple: most R&D credits require payroll documentation, data that is already stored in Gusto’s system of record. Ardius in its current incarnation was designed to tap into a number of payroll data providers and extract that data and turn it into verifiable tax documents. With this tie-up, the companies can simply do that automatically for Gusto’s extensive number of customers.

Joshua Reeves, co-founder and CEO of Gusto, said that the acquisition falls in line with the company’s long-term focus on customers and simplicity. “We want to bring together technology, great service, [and] make government simpler,” he said. “In some ways, a lot of stuff we’re doing — make payroll simpler, make healthcare simpler, make PPP [loans] and tax credits simpler — just make these things work the way they’re intended to work.” The company presumably could have built out such functionality, but he noted that “time to market” was a crucial point in making Ardius the company’s first acquisition.

Tomer London, co-founder and chief product officer, said that “we’ve been looking at this space for a long time because it kind of connects to one of our original product principles of building a product that is opinionated,” he said. In a space as complicated as HR, “we want to be out there and be an advisor, not just a tool. And this is just such a great example of where you can take the payroll data that we already have and in just a few clicks and in a matter of a few days, get access to really important cash flow for a business.” He noted that tax credits is “something that’s been on our roadmap for a long time.”

Gusto works with more than 100 third-party services that integrate on top of its platform. Reeves emphasized that while Ardius is part of Gusto, all companies — even those who might compete directly with the product — will continue to have equal access to the platform’s data. In its release, the company pointed out that Boast.ai, Clarus, Neo.Tax, and TaxTaker are just some of the other tax products that integrate with Gusto today.

Of course, Ardius is just one of a number of competitors that have popped up in the R&D and economic development tax credit space. MainStreet, which I last profiled in 2020 for its seed round, just raised $60 million in funding in March led by SignalFire. Meanwhile, Neo.tax, which I also profiled last year, has raised a total of $5.5 million.

Reeves was sanguine about the attention the space is garnering and the potential competition for Ardius. When it comes to R&D tax credits, “whatever creates more accessibility, we’re a fan of,” he said. “It’s great that there’s more awareness because it’s still under-utilized frankly.” He emphasized that Gusto would be able to offer a more vertically-integrated solution given its data and software than other competitors in the space.

While the pandemic particularly hit SMBs, who often lacked the financial wherewithal of larger companies to survive the crisis, Gusto actually expanded its business as new companies sprouted up. Reeves said the company grew its customer base 50% in its last fiscal year, which ended in April. It “turns out in a health pandemic and in an economic crisis, things like payroll and accessing health care are quite important,” he said. Gusto launched a program to help SMBs collect the government’s stimulus PPP loans.

The company’s main bases of operation are in San Francisco, Denver and New York City, and the company has a growing contingent of remote workers, including the Ardius crew, who will remain based in LA. While Reeves demurred on future acquisitions, Gusto’s focus on expanding to a comprehensive financial wellness platform for both employees and businesses would likely suggest that additional acquisitions may well be in the offing in the future.

Beamery raises $138M at an $800M valuation for its ‘operating system for recruitment’

Online job listings were one of the first things to catch on in the first generation of the internet. But that has, ironically, also meant that some of the most-used digital recruitment services around today are also some of the least evolved in terms of tapping into all of the developments that tech has to offer, leaving the door open for some disruption. Today, one of the startups doing just that is announcing a big round of funding to double down on its growth so far.

Beamery, which has built what it describes as a “talent operating system” — a way to manage sourcing, hiring and retaining of people, plus analyzing the bigger talent picture for an organization, a “talent graph” as Beamery calls it, in an all-in-one, end-to-end service — has raised $138 million, money that it plans to use to continue building out more technology, as well as growing its business, which has been expanding quickly and saw 337% revenue growth year over year in Q4.

The Ontario Teachers’ Pension Plan Board (Ontario Teachers’), a prolific tech investor, is leading the round by way of its Teachers’ Innovation Platform (TIP). Other participants in this Series C includes several strategic backers who are also using Beamery: Accenture Ventures, EQT Ventures, Index Ventures, M12 (Microsoft’s venture arm) and Workday Ventures (the venture arm of the HR software giant).

Abakar Saidov, co-founder and CEO at London-based Beamery, told TechCrunch in an interview that it is not disclosing valuation, but sources in the know say it’s in the region of $800 million.

The round is coming on the heels of a very strong year for the company.

The “normal” way of doing things in the working world was massively upended with the rise of Covid-19 in early 2020, and within that, recruitment was among one of the most impacted areas. Not only were people applying and interviewing for jobs completely remotely, but in many cases they were getting hired, onboarded and engaged into new jobs without a single face-to-face interaction with a recruiter, manager or colleague.

And that’s before you consider the new set of constraints that HR teams were under in many places: variously, we saw hiring freezes, furloughs, layoffs and budget cuts (often more than one of these per business), and yet work still needed to get done.

All that really paved the way for platforms like Beamery’s — designed not only to be remote-friendly software-as-a-service running in the cloud, but to handle the whole recruiting and talent management process from a single place — to pick up new customers and prove its role as an updated, more user-friendly approach to the task of sourcing and placing talent.

“Traditional HR is very admin-heavy, and when you add in payroll and benefits, the systems that exist are very siloed,” said Saidov in the interview. “The innovation for us has been to move out of that construct and into something that is human, and has a human touch. From a data perspective, we’re creating the underlying system of record for all of the people touching a business. So when you build on top of that, everything looks like a consumer application.”

In the last 12 months, the company said that customers — which are in the area of large enterprises and include Covid vaccine maker AstraZeneca, Autodesk, Nasdaq, several major tech giants, and strategic investor Workday — filled 1 million roles through its platform, a figure that includes not just sourcing and placing candidates from outside of an organization’s walls, but also filling roles internally.

The work that Beamery is doing is definitely helping the business not just pull its weight — its last round was a much more modest $28 million, which was raised way back in 2018 — but grow and invest in new services.

The company said it had a year-on-year increase of 462% in jobs posted across its customer base. A year before that (which would have extended into pre-pandemic 2019), the number of candidates pipelined increased by a mere 46%, pointing to acceleration.

Beamery today already offers a pretty wide range different services.

They include tools to source candidates. This can be done organically by creating your own job boards to be found by anyone curious enough to look, and by leveraging other job boards on other platforms like LinkedIn, the Microsoft-owned professional networking platform that counts “Talent Solutions” — ie recruitment — as one of its primary business lines. (Recall Microsoft is one of Beamery’s backers.) It also provides tools to create and manage online recruitment events.

Beamery also offers tools to help people get the word out about a role, with a service akin to programmatic advertising (similar to ZipRecruiter) to populate other job boards, or run more targeted executive recruitment searches. It also provides a way for HR teams to create internal recruitment processes, and also run surveys with existing teams to get a better picture of the state of play.

And it has some analytics tools in place to measure how well recruitment drives, retention and other metrics are evolving to help plan what to do in the future.

The big question for me now is how and if Beamery will bring more into that universe. There have been some interesting startups emerging in the wider world of talent IT (if we could call it that) that could be interesting complements to what Beamery already has, or provide a roadmap for what it might try to build itself.

It includes much more extensive work on internal job boards (such as what Gloat has built); digging much deeper into building accurate pictures of who is at the company and what they do (see: ChartHop); or the many services that are building ways of sourcing and connecting with contractors, which are a huge, and growing, part of the talent equation for companies (see: Turing,  RemoteDeelPapaya GlobalLattice, Factorial, and many others).

Beamery already includes contractors alongside full- and part-time roles that can be filled using its platform, but when it comes to managing those contractors, that’s something that Beamery does not do itself, so that could be one area where it might grow, too.

“The key reason enterprises work with us it to consolidate a bunch of workflows,” Saidov said. “HR hates having different systems and everything becomes easier when things interoperate well.” Employing contractors typically involves three elements: sourcing, management and scheduling, so Beamery will likely approach how it grows in that area by determining which piece might be “super core” the centralization of more data, he added.

Another two likely areas he hinted are on Beamery’s roadmap are assessments — that is, providing tools to recruiters who want to measure the skills of applicants for jobs (another startup-heavy area today) — and tools to help recruiters do their jobs better, whether that involves more native communications tools in video and messaging, as well as Gong-like coaching to help them measure and improve screening and interviewing.

It might also consider developing a version for smaller businesses to use.

Questions investors are happy to see considered, it seems, as they invest in what looks like a winner in the bigger race. TIP’s other investments have included ComplyAdvantage, Epic Games, Graphcore, KRY and SpaceX, a long run in a wide field.

“Leading companies worldwide are prioritising recruitment and retention. They are turning to Beamery for a best-in-class talent solution that can be seamlessly integrated with their business,” said Maggie Fanari, MD for TIP in Emea. “Beamery’s best-in-class approach is already recognized by top-tier companies. I’m excited by the company’s vision of to use technology to support long-term talent growth and build better businesses. Beamery is the first company to bring predictive marketing and data science into recruitment. They are a truly innovative company, building a vision that can shape the future of work – the company fits all the criteria we look for in a TIP investment and more.”

The fintech endgame: New supercompanies combine the best of software and financials

If money is the ultimate commodity, how can fintechs — which sell money, move money or sell insurance against monetary loss — build products that remain differentiated and create lasting value over time?

And why are so many software companies — which already boast highly differentiated offerings and serve huge markets— moving to offer financial services embedded within their products?

A new and attractive hybrid category of company is emerging at the intersection of software and financial services, creating buzz in the investment and entrepreneurial communities, as we discussed at our “Fintech: The Endgame” virtual conference and accompanying report this week.

These specialized companies — in some cases, software companies that also process payments and hold funds on behalf of their customers, and in others, financial-first companies that integrate workflow and features more reminiscent of software companies — combine some of the best attributes of both categories.

Image Credits: Battery Ventures

From software, they design for strong user engagement linked to helpful, intuitive products that drive retention over the long term. From financials, they draw on the ability to earn revenues indexed to the growth of a customer’s business.

Fintech is poised to revolutionize financial services, both through reinventing existing products and driving new business models as financial services become more pervasive within other sectors.

The powerful combination of these two models is rapidly driving both public and private market value as investors grant these “super” companies premium valuations — in the public sphere, nearly twice the median multiple of pure software companies, according to a Battery analysis.

The near-perfect example of this phenomenon is Shopify, the company that made its name selling software to help business owners launch and manage online stores. Despite achieving notable scale with this original SaaS product, Shopify today makes twice as much revenue from payments as it does from software by enabling those business owners to accept credit card payments and acting as its own payment processor.

The combination of a software solution indexed to e-commerce growth, combined with a profitable payments stream growing even faster than its software revenues, has investors granting Shopify a 31x multiple on its forward revenues, according to CapIQ data as of May 26.

How should we value these fintech companies, anyway?

Before even talking about how investors should value these hybrid companies, it’s worth making the point that in both private and public markets, fintechs have been notoriously hard to value, fomenting controversy and debate in the investment community.

Slintel scores $20M Series A as buyer intelligence tool gains traction

One clear outcome of the pandemic was pushing more people to do their shopping online, and that was as true for B2B as it was for B2C. Knowing which of your B2B customers are most likely to convert puts any sales team ahead of the game. Slintel, a startup providing that kind of data, announced a $20 million Series A today.

The company has attracted some big-name investors with GGV leading the round and Accel, Sequoia and Stellaris also participating. The investment brings the total raised to over $24 million including a $4.2 million seed round from last November.

That’s a quick turnaround from seed to A, and company founder and CEO Deepak Anchala, says that while he had plenty of runway left from the seed round, the demand was such that it seemed prudent to take the A money sooner than he had planned. “So we had enough cash in the bank, but investors came to us and we got a pretty good valuation compared to the previous round, so we decided to take it and use that money to go faster,” Anchala said.

Certainly the market dynamics were working in Slintel’s favor. Without giving revenue details, Anchala said that revenue grew 5x last year in the middle of the worst of the pandemic. He says that meant buyers were spending less time with sales and marketing folks to understand products and more time online researching on their own.

“So what Slintel does as a product is we mine buyer insights. We understand where the buyers are in their journey, what their pain points are, what products they use, what they need and when they need it. So we understand all of this to create a 360 degree view of the buyer that you provide these insights to sales and marketing teams to help them sell better,” he said.

After growing at such a rapid clip last year, the company expected more modest growth this year at perhaps 3x, but with the added investment, he expects to grow faster again. “With the funding we’re actually looking at much bigger numbers. We’re looking at 5x in our revenue this year, and also trying for 4x revenue next year.”

He says that the money gives him the opportunity to improve the product and put more investment into marketing, which he believes will contribute to additional sales. Since the round closed 6 weeks ago, he says that he has increased his advertising budget and is also hopes to attract customers via SEO, free tools on the company website and events.

The company had 45 employees at the time of its seed round in November and has more than doubled that number in the interim to 100 spread out across 10 cities. He expects to double again by this time next year as the company is growing quickly. As a global company with some employees in India and some in the U.S., he intends to be remote first even after offices begin to reopen in different areas. He says that he plans to have company gatherings each quarter to let people gather in person on occasion.

Carlyle acquires 1E.com, an endpoint and hybrid working specialist, in $270M deal

Remote work was the order of the day for the past 16 months, but as we (fingers crossed) move out of the pandemic, it’s looking like a lot of people may move into a new era of hybrid work: less focus being present in offices to feel like you are getting things done, less time commuting, and more time to be productive. To help better address that opportunity, a company called 1e, which builds solutions for companies to enable hybrid working along with managing the wider space of endpoint management, has been acquired by Carlyle on the heels of a strong year of business.

The private equity firm has picked up the London-based company in a $270 million deal.

The acquisition is coming in the form of a majority stake with CEO and co-founder Sumir Karayi maintaining a significant minority stake, along with employees of the company. The firm is completely bootstrapped — no outside investors, no VCs on the cap table prior to this deal — and profitable, with growth of 28% in the last year.

The birth and now exit of 1e is an interesting counterpoint to that of most of the enterprise startups that you will read about on the pages of TechCrunch, or maybe in tech press overall.

The company was started in 1997 when Karayi and co-founders Phil Wilcock and Mark Blackburn were at Microsoft working as in-house consultants helping enterprises adopt and adapt to Microsoft software. Karayi decided he wanted to start something of his own, rather than, in his words, “working for Microsoft forever.”

Given his background, his business started first as a consultancy, but he said that it didn’t take long to pivot, since “We realized that the problems we were looking to solve we needed to build technology to do that, so we started to write our own software.”

The company got its start as a Microsoft shop, building endpoint technology management, along with tools to help companies manage their computer terminals and networks better. That included products like NightWatchman, a power management tool for PCs and servers that helped save energy consumption for businesses; Nomad, a bandwidth management tool that helps reduce server usage; and Shopping, a platform for companies to build app-store-like experiences for internal employees or customer-facing tools.

Over time — years before the Covid-19 pandemic — that also evolved into software to enable hybrid working environments, which were already emerging as a thing and already posing challenges to businesses and users.

“The challenge was that remote working was a second-class experience,” he said, with technical support, software usage, network connectivity, device issues and just about everything harder to sort out when problems arose for workers not working in the office. So 1e — a play on the last two characters of the error message you get on a failing PC, “STOP 0x0000001E” — built software to address that, too.

Overall the company amassed some 40 patents on its technology, which now is used across more than 11 million devices among 500 large enterprise customers, including AT&T, Nestle, and a number of big banks that can’t be named.

It’s been the remote working software that has seen the company through an especially strong year — no surprise there, given the environment many of us have been working in — where businesses have been buying its tools as part of their “digital transformation” efforts, and it was this that got Karayi thinking that the company — which had largely built the business it had today on an employee base of people who just like building new things, and word-of-mouth between end users — could finally do with an outside investment and cash injection to take the business to the next level.

“We’re going through a seismic change right now and we think it’s a big opportunity for 1e,” he noted, adding that while many of us might feel like remote work is everywhere, he believes this is just the beginning of how to enable better remote working. “I think the office boat has sailed,” he said.

1e went with Carlyle among a number of other bidders as it seemed like the right fit: strong support and understanding of the business, combined with a well-recognized name. The plan more generally is to follow the PE playbook if all goes well: four years of growth, with “all later options open.”

“We were attracted to 1E’s fully integrated digital experience technology, which is differentiated by its advanced remediation and automation capabilities, and are delighted to partner with Sumir as we support the company as it enters its next phase of growth,” said Fernando Chueca, an MD in the Carlyle Europe Technology Partners (CETP) advisory team. “With strong industry tailwinds, we believe 1E has significant growth opportunities and we look forward to supporting another founder-backed business to scale through investments in product innovation, commercial operations, and international expansion.”

Other recent deals from Carlyle in Europe have included Eggplant, NetMotion Software, Apama, UC4/Automic Software and ITRS.

Sinch snaps up MessageMedia for $1.3B to compete with Twilio in business SMS services

Sinch — the Swedish company that provides a suite of services for companies to build communications and specifically “customer engagement” into their services by way of APIs — has made yet another acquisition in its global march to scale up its business and compete more squarely with Twilio. The company today announced that it has acquired MessageMedia, a provider of SMS and other messaging services for businesses to manage customer relations, user authentication, alerts and more.

The acquisition is being made for $1.3 billion — comprised of $1.1 billion in cash and the rest in shares (or in Sweden’s currency, SEK10,745 in total based on Sinch’s share price and yesterdays exchange rate). The deal is expected to close in the second half of this year.

The deal is notable not just for giving Sinch a major inroad into the world of business SMS, but also because of the timing. Less than a month ago, Sinch’s big rival Twilio announced that it would acquire ZipWhip, another big player in the same area of business SMS, for $850 million.

MessageMedia, based out of Melbourne, Australia, is currently operational also in New Zealand, the U.S. and Europe, where it focuses on providing services primarily to the SMB market with a self-service platform where customers can build and operate services, with the option of using a web portal provided by MessageMedia to handle the traffic.

It has some 60,000 customers and handles 5 billion+ messages annually, Sinch said. Growth is particularly strong in the U.S. market, where MessageMedia is adding 1,500 new customers each month. Alongside SMS, it also provides tech for companies to build MMS experiences and mobile landing pages, and it also provides them with tools to integrate other features as well as an API gateway.

For Sinch — which is publicly traded in Sweden and currently has a market cap of $13.6 billion — the deal comes just weeks after the company announced that it would be raising $1.1 billion for more acquisitions, with a big chunk of the money coming from Softbank, one of its major backers.

Given the size of this deal announced today, now we know which deal Sinch had in mind. It would be interesting to know whether Sinch’s move to buy MessageMedia predated Twilio’s for ZipWhip, which definitely do not feel like a coincidence.

“Addressing small and medium-sized businesses opens up a new avenue to growth and dramatically expands our addressable market. With MessageMedia as a part of Sinch, we will have the best team in the industry to capitalize on that opportunity,” said Oscar Werner, Sinch CEO, in a statement.

Since has been on a fast pace of buying up companies in recent times to scale up its existing business, tapping not just into the huge surge of people using phones and the internet to communicate in these pandemic-stricken times, but also to bulk up and have more economies of scale in the communications industry, essentially a business built on aggregating incremental revenues.

That fact has led to a lot of consolidation, with Twilio also buying up strategic, smaller businesses in quick order.

In this regard, MessageMedia is a strong buy for Sinch because it’s generating strong cash. MessageMedia is expected to make $151 million in profits for the year ending June 30, with gross profits of $94 million and Ebitda of $51 million, Sinch said. Sinch itself is also profitable.

Sinch’s other deals have included Inteliquent for $1.14 billion, ACL in India for $70 million and SAP’s digital interconnect business for $250 million.

For its part, MessageMedia very much plays into and is a product of the same API economy that has lifted the likes of Twilio, Stripe and many others built on the premise of knitting together very complex services, which customers can then use by way of simple lines of code that they integrate into their own digital operations, be it websites, apps, or internal systems.

Communications, and specifically messaging API-based systems are estimated to be a $9-13 billion market, Sinch said, with the U.S. accounting for 30% of that, and the global market projected to grow between 25-30% until 2024. SMBs, who might lack the resources to build such tools from the ground up, are a big part of that activity.

“Mobile messaging delivers tremendous ROI but smaller businesses often lack tools that cater to their specific needs,” said Paul Perrett, MessageMedia CEO, in a statement. “Serving these customers presents a tremendous opportunity, and with Sinch we can build a global leader in our field.”