InsideSales Raises Another $60 Million, Placing Valuation Well North of $1 Billion

InsideSales, an emerging force in the exploding predictive analytics market, has completed a $60 million funding round, with the unlikely pairing of software behemoths Salesforce and Microsoft leading the investment charge, the company told CRN on Wednesday.

The latest round values the Provo, Utah-based vendor of sales acceleration software somewhere near the $1.5 billion mark.

Existing investors -- Polaris Partners, Kleiner Perkins Caufield Byers, Hummer Winblad, U.S. Venture Partners and Zetta Venture Partners -- also all beefed up their stakes in InsideSales in the latest funding round.

[Related: With Salesforce Investment, InsideSales Preps For Another Year of Triple-Digit Growth]

Speaking with CRN on Wednesday immediately after delivering his keynote at IS Accelerate, his company's conference, InsideSales founder and CEO Dave Elkington said investment from two of the world's largest SaaS vendors -- not to mention unlikely bedfellows -- positions InsideSales to make a major move in the market.

"We've been at this for just about 12 years. In a way we're a startup and in a way we're not," Elkington told CRN.

In the company's first eight years of existence, its business was entirely focused on building productivity tools for its clients.

But something funny happened along the way. As part of the process of studying customer sales stats, InsideSales collected mountains of data. As the world entered the era of big data, and mining that data for insight into buying patterns became big business, the 13 billion sales transactions in its database were suddenly a major asset in themselves.

Today's InsideSales product is "very data-intensive," said Elkington, "and it took roughly seven, eight years before we had enough data to [become] meaningful."

Salesforce CEO Marc Benioff was so impressed by the product upon encountering it at October's Dreamforce conference that he personally invited InsideSales leaders to present to his team, then followed that meeting up with an initial investment.

"At Dreamforce we had such a presence that it turned a lot of heads," Elkington said.

The two companies are aligned not just by business, but also by culture, Elkington told CRN. InsideSales has modeled its foundation on Benioff's 1/1/1 philanthropic pledge.

InsideSales recently became a Premier Salesforce partner, and has recruited some of the CRM leader's top execs for senior leadership positions.

But this week's round took it to another level.

"Frankly, the size and scale of the Salesforce investment was also unheard of," Elkington said.

Microsoft's involvement is even more surprising, according to the CEO. Over the past several years, the world's largest software company has invested in only a couple of private software companies, one of which was Facebook.

"It's an amazing combination of the two goliaths in SaaS," Elkington told CRN. "Salesforce is a titan, invented SaaS and invented cloud computing, and Microsoft is Microsoft."

The partnership between the three companies create a "unique synergy" that will help InsideSales more tightly integrate its product's self-learning engine, Neuralytics, with the platforms of its two investors, according to Elkington.

InsideSales has already integrated with Microsoft Outlook to predict email-based interactions and determine which communication methods are most meaningful and effective. That data is merged with some from Salesforce about historical sales interactions and account information.

"Predictive analytics is able to combine both ecosystems and create highly tuned, highly accurate sales prescriptions," Elkington said.

With enviable technology partnerships secured, the company is looking to grow its VAR program and create a channel for system integrators and ISVs who can build products on the InsideSales backbone.

The company needs partners to handle the scaling challenges associated with its tremendous growth, Elkington told CRN.

He said no vendor has really mastered how to do partnerships with SaaS products, and finding the right formula will be a priority in the coming year, with a major channel push set for Europe in the coming months.

PUBLISHED MARCH 18, 2015