Crunchbase wants to expand its database of startups with $50 million in new money – sure naira
In both downtime and boom times, companies in various industries face the challenge of building sales pipelines and closing revenue. “Account-based” intelligence – ie researching potential customers – can help during the prospecting process. But it requires a thorough, vetted source of information and contacts in departments such as business development, sales, and recruiting.
That’s why more and more companies rely on crunch base, says CEO Hunter McConnell. With roots in a homegrown project by sure naira founder Michael Arrington designed to index startups in sure naira articles, Crunchbase has evolved over the past 15 years into an API-driven database of startups and financial reports, along with a growing news division.
Crunchbase now attracts more than 75 million unique visitors annually and recently surpassed 60,000 paying customers, with more than half of the Fortune 500 represented, according to McConnell.
“We find and work with qualified accounts, while at the same time raising awareness for companies that want to be discovered,” he told sure naira via email. “From the day of our spin-out [as an independent company in 2015] … we’ve built a prospecting platform powered by the best proprietary data we’re known for, enabling dealmakers to find and interact with qualified accounts, while also raising awareness among companies seeking discovery.”
Investors seem convinced. This morning, Crunchbase closed an oversubscribed Series D round of $50 million led by Alignment Growth with participation from OMERS Ventures, Mayfield and Emergence Capital. CEO Jager McConnell declined to disclose the valuation, describing it as a “significant upward round”. Crunchbase had a retrospective valuation of $70 millionaccording to PitchBook – ironically a competitor to Crunchbase.
“The Crunchbase software-as-a-service platform combines rich and proprietary business data with direct access to decision makers within a single intuitive interface — at attractive prices, making it a powerful tool to increase return on investment in a variety of use cases. , from sales to recruiting and more,” Alignment growth partner Alex Iosilevich said in an emailed statement. Iosilevich plans to join Crunchbase’s board of directors soon. “We expect Crunchbase to continue to see accelerated industry adoption and are excited to support the company’s growth momentum alongside strong participation from the existing investor group.”
The core of Crunchbase as it exists today is a research suite for sales teams. Entries show when a company was founded, its founders and executive leadership, and funding and debt rounds (and their contributors). Paid Crunchbase plans unlock competitor data, history, and more.
Crunchbase employs a team of writers who cover funding rounds and other Crunchbase-relevant content at Crunchbase News. (This writer is known to cite their work from time to time.) As for the primary database, it is updated manually and automatically through thousands of partnerships and syndication agreements with LinkedIn, Business Insider, and others.
As McConnell sees it, Crunchbase can reduce the amount of time sales teams spend prospecting by flagging companies with “growth signals” — for example, funding rounds or increased product adoption.
“As tough economic conditions affect more companies, knowing whether a target account is on the rise or not allows prospectors to target decision-makers with purchasing power,” McConnell said. “Our tools encourage account-based selling, which encourages dealmakers to prioritize their prospecting efforts based on the companies they need to contact rather than the individuals. This is the opposite of ‘squirt and pray’ approach, which relies on huge contact lists and leads to the kind of spam that no one likes.”
Additions to the platform in recent months have focused on discovery, for example allowing Crunchbase customers to find companies that fit a profile by filtering by territories or attributes such as “diversity.” Machine learning based recommendations highlight new accounts and similar companies to consider, while customer relationship management data in search results highlights accounts that may be new to a particular seller.
In addition to the discovery, McConnell drew attention to Crunchbase’s recent qualification and tracking improvements, such as a Chrome extension that shows context about accounts as they’re being investigated. Crunchbase customers can now sync new accounts that meet their criteria with Salesforce and receive email alerts for “priority” accounts, or create lists, saved searches, notes, and tags for matches.
On the engagement tooling side, Crunchbase now shows “decision makers” contact information — which is searchable — and integrates with email providers, including Gmail. Customers can use automatically generated email templates that pull in relevant, targeted data about prospects of particular interest.
McConnell says Crunchbase resisted adding contact information for “a long time” because of privacy concerns, but eventually concluded it was “incredibly valuable” to customers. “We have done our utmost to ensure that we do this the right way, by encouraging informed education and complying with all current laws and regulations,” he said. “Fortunately, our business model does not depend on contact details at all.”
Crunchbase competes not only with the aforementioned PitchBook, but also with CB Insights, Owler and other prospecting services and databases. Lusha, a crowdsourced data platform for business-to-business sales, recently raised $205 million at a valuation of $1.5 billion. Meanwhile, Apollo.io made $110 million as its sales intelligence platform crisscrossed 16,000 paying businesses.
McConnell sees differentiation — and raw ambition — as key to Crunchbase’s continued growth. To that end, Crunchbase plans to launch an integration with Hubspot and enhanced machine learning-powered suggestions that recommend accounts, contacts, and tasks for various prospecting goals. More sophisticated dashboards are also under development to help customers track “activity effectiveness” on Crunchbase, including annual recurring revenue (ARR) generated by opportunities discovered through the platform.
“The recent onslaught of downturns and massive layoffs of companies that have very recently attained unicorn status shows how excessive burn rates can be hidden behind over-funded rounds, obscuring the reality of weak corporate fundamentals,” McConnell said. “I am especially proud of the fact that we have been able to generate growth while keeping our burn rate under control. In the first half of this year, we achieved a net new ARR of $9 million with a burn of just $2 million – that’s best-in-class by Bessemer’s efficiency benchmarks and puts us on the path to profitability… We plan to double our business-to-business software ARR this year, ending at approximately $38 million in ARR for this customer segment alone.”
Crunchbase’s latest funding brings the total amount raised to $106.5 million. A portion of the proceeds will go toward expanding the team from 220 to about 275 by the end of the year, McConnell said.