This morning LeadIQ, a startup working in the sales software market, announced that it has closed a $30 million Series B led by Cathay Innovation. Other investors in the transaction include Fresco Capital, Strong Ventures and Eight Road Ventures.
LeadIQ frames its product from the perspective of missed revenue targets at companies, which it claims impact nearly two-thirds of today's deals. The startup's service is designed to save sales staff time by taking on the brunt of data entry work from the sales prospecting process by automating lead capture. The LeadIQ product also includes analytics covering a customer's prospecting efficiency, which can then be segmented by worker performance and more general breakdowns like industry and company size.
Previously, LeadIQ raised around $12 million, though the company told TechCrunch that it had only spent $6 million of that total, despite reaching eight-figure ARR (the $10 million threshold).
Why raise more capital if it didn't need the funds? According to CEO and co-founder Mei Siauw, LeadIQ is moving toward supporting account management instead of merely lead management. Building new products is expensive, and thus more capital will help the company staff up for the work.
Why work toward sales account management over simply focusing on leads? According to Siauw, the effort will help sales teams better work with marketing teams, allowing for more complete information sharing and hopefully better sales results. The CEO likened marketing as similar to fishing with a net. Sales, she said, is more akin to hunting fish with a spear. With account-level tooling leading to more complete information sharing, she hopes to give sales teams a better shot at catching more fish, to extend the analogy.
The company has been efficient to date, as noted above. Frugality, however, is only a virtue in startup-land when it is coupled to rapid growth. LeadIQ hits that mark, having grown its annual recurring revenue (ARR) by around 3x in the last year. The company also sports net retention figures of around 125%, and a strong ratio of account size versus customer acquisition costs. Those are the sorts of metrics that SaaS investors covet.
The LeadIQ round is another data point in our understanding of the current market for sales-focused software. It appears to be an active sector with fellow sales software service Gongo.io raising rapid-fire rounds in recent quarters, including a $250 million investment earlier this year, and a $200 million check in August of 2020. Gong works in what it calls "the revenue intelligence" market when it raised this June.
The sales software market has also seen exits recently, including a $575 million deal between ZoomInfo and the smaller Chorus.ai. Chorus had posted rapid revenue growth ahead of its exit, raising north of $100 million before it sold to the larger company.
LeadIQ has around 115 employees, its CEO said, a number that it intends to double in the next 18 months or so. Today those workers hail from 22 countries, making LeadIQ the epitome of the now-standard micro-multinational model that many early-stage startups are pursuing. Notably LeadIQ has two main hubs, one in the United States and one in Singapore. Siauw says that Europe may be next.
Now flush with more funds than ever, let's see how quickly LeadIQ can expand its revenues in the next year. That next milestone should help us understand both if the company will become an IPO candidate, and how deep its market truly is.