We have followed carefully the activity of the large private equity player Vista Equity Partners as it continues to make investments in the SaaS space. So when the news came out last week that Vista was taking a stake in Atlanta Tech Village alumni Salesloft, it extended the story of Vista’s aggressive activity.
According to Salesloft’s CEO Kyle Porter, the new money puts the 10-year-old company at a $2.3 billion valuation.
Meanwhile, Vista Equity Partners is hardly alone among private equity concerns placing bets on the tech sector. According to Dealogic, more than $400 billion in private equity bets have been placed on the tech space. That compares to just under $200 billion a year ago. So everyone is in on the game it seems.
Orchestrating the Sales Process
Large and small businesses alike use Salesloft to orchestrate their sales processes. The company has an estimated 4,000 customers. And its current ARR tops $100 million. It also posts a very respectable $25,000 ARPU.
We’d estimate that there’s a pretty sharp fall off from some of their corporate customers’ level of spending. The company noted that its corporate customers include Alphabet, IBM, and Microsoft’s LinkedIn. We like how Salesloft bundles its solution according to the business objective of the customer. Customers can select solutions that focus on “prospecting”, “selling or closing” or “engaging”.
Each solution offers different features of the platform. The chatbot that an inquisitive prospect engages with is pretty smart and essentially requires an email for any deeper dive into the solution. The company has built a rich ecosystem of integration with some of the better-known sales-centric apps. By building out of a robust ecosystem of apps, the company positions itself as the “one place for sellers to execute all of their digital selling tasks, communicate with buyers, understand what to do next, and get the coaching and insights they need to win.”
Vista’s fresh capital will help to propel Salesloft’s further expansion into Asia Pacific, Europe, the Middle East, and Africa regions. According to the company, it has seen over 100% growth in Europe over the most recent 12 months. With success in those regions, we’d expect the company is aiming for a public offering sometime in the next 24 months. According to the release some 20 of Vista’s company portfolio companies currently use Salesloft in their own sales process.
A Story of Major Pivots
One quick aside. We’ve spent time in the past at the Atlanta Tech Village, where Salesloft made its start. Here’s what Atlanta Tech Village founder David Cummings said on his blog about Salesloft’s latest news.
“Salesloft is partly a story of major pivots. Ten years ago the initial product was a job change alerts app that notified sales reps when a contact joined a new company. That idea failed and the company morphed into a contact scraping and leads database. While the prospector product took off and generated millions of revenue, it was eventually shut down,” Cummings wrote.
“From there, the final pivot was to a sales engagement platform that achieved the proverbial hockey stick growth and recently hit $100 million in annual recurring revenue. Prior to the Vista Equity acquisition, Salesloft had $246 million of funding and 762 employees.”
So we think what David shared is an important reminder that few start-ups achieve unicorn status without many ups and downs. It is the commitment of the leaders of the business, in this case, Kyle Porter, that is the difference between a footnote and success.