- The hot Seattle startup Outreach has raised another $US65 million, bringing its total investment to $US125 million at a valuation of about $US500 million, CEO Manny Medina told Business Insider.
- It’s another moment of triumph for Medina, a former Amazon Web Services and Microsoft exec.
- This startup, his first, was on the verge of bankruptcy just a few years ago until the team’s determination led to a product that turned out to be a big hit.
- Sales grew so rapidly that Medina convinced venture capitalists to invest millions with one “cocky” slide, he said.
Outreach, a Seattle startup that offers software to help salespeople automate their work, has just raised another $US65 million.
That brings its total investment to $US125 million. Investors have now valued the company at about $US500 million, or “half a unicorn, the back half,” CEO Manny Medina jokingly told Business Insider.
Medina, a former Amazon Web Services and Microsoft executive, is known as a high-energy, cheerful leader who has memorized every employee’s name, he says, and spends the first hour of the workday fist-bumping every employee in the office. (The company is now 300 employees strong, double from a year ago, albeit not all work in the Seattle headquarters.)
He has reason to be happy. In 2015, Medina’s startup was on the verge of bankruptcy. In those days, it offered HR recruiting software that wasn’t selling well.
In an all-out effort to save the company, Medina and his team went on a sales frenzy and built a workflow app to automate the cold-calling process. The app allowed the three sales folks to spend less time digging up leads and writing initial emails and more time in actual meetings.
The customers at those meetings still didn’t want the HR tool, but they did want the automatic-cold-calling app. So the company changed course and turned that homegrown app into a product, quickly booking $US1 million in sales.
When his cofounders pushed him to find some investors, Medina did so begrudgingly, he previously told Business Insider. Running a business the old-fashioned way, based solely on sales, made him “very cocky.”
“When you have a survivor mentality, you feel like ‘I don’t need your money,'” he said.
“I had one slide – it was a chart,” Medina said, describing his talks with venture capitalists. “I said: ‘This is our revenue growth chart. We sell to salespeople. Any questions?'”
Sales were coming in so rapidly that halfway through the VC meeting, he would refresh the slide and the numbers would jump. The company had zoomed from $US1 million to $US10 million under contract just two years after almost going bankrupt.
That single slide landed the company a $US2.3 million seed round, and later, another $US9.2 million.
Medina then went on to raise more substantial rounds. The latest one was led by Spark Capital with participation from a new investor, Sapphire Ventures, the VC arm of the enterprise-software giant SAP. Its existing investors DFJ Growth, Four Rivers Group, Mayfield, MHS Capital, Microsoft Ventures, and Trinity Ventures also participated.
Medina is now positioning Outreach and his competitors as the next giant market after Salesforce – the dominant player in sales software – with customer-relationship-management software, designed to keep track of customers.
“It’s not going to be a new CRM that displaces CRM, but something new,” he said.
He calls this next thing “sales engagement” because it does more than just store lists of contacts, actively helping salespeople handle more tasks.
VCs are apparently agreeing. Medina points out that other sales-automation tools are raising big bucks as well, including InsideSales, which has raised about $US300 million and is being watched for signs of an initial public offering, and Intercom, which has raised about $US240 million.
Though Medina no longer uses the single “cocky” slide when raising money, he did share it with us. It shows one metric: the company’s monthly recurring revenue.
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