Outreach Inc., a software maker that helps to automate essential, but mundane work for salespeople, 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.
“Sales engagement is a very hot category so sales teams are realizing they need software for their actions," Manny Medina, Outreach’s chief executive officer, said in an interview. 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,’’ George Bischof, a managing director at Meritech, said in an interview. “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.
There were more than 300 unicorn companies as of January, according to CB Insights.