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Sales Tech Mayhem: More Unicorns, Sales Enablement Mayhem and New Entrants

By Craig Rosenberg | August 23, 2021 | 0 Comments

Sales

This post has been co-authored with Dan Gottlieb

The Sales Tech Mayhem action is fierce. August 2021 alone saw the announcement of 2 new unicorns and an acquisition. Our last post on the market was only a couple weeks ago and we already have 33 more bullets. In the era of Sales Tech Mayhem, if you turn your head for a minute – you will miss something big.

To recap: Sales Tech Mayhem is the current period which started roughly a year ago where the sales tech market has begun rapidly moving from a wide set of categories into a narrow list of vendors with wide portfolios of capabilities. This mayhem is likely to continue over the next couple years. We defined Sales Tech Mayhem in a lot more detail in our last post 39 observations from a scorching hot tech market and our research note Impact of ZoomInfo’s Acquisition of Chorus (Gartner subscription required). 

Sales tech is not all unicorns and acquisitions. There has been some very interesting early stage activity adding to the Mayhem of which we will cover below and in coming posts.  

Here we go:

Sales Tech Mayhem Exhibit A: The unicorn list just grew again

  1. In the 2 weeks since our last post, 2 new unicorns were publicly announced.
  2. People.ai announced a $100M Series D putting them at a $1.1b valuation.
  3. Mindtickle raised a $100M Series E putting them at $1.2b valuation.
  4. That increases the unicorn number of 6.5 to 8.5.
  5. 8 sales tech unicorns ($1 billion-plus) valuations — Outreach, SalesLoft, Gong, HighSpot, Seismic and Clari and now Mindtickle and People.ai.
  6. Why 8.5? 6Sense is a Martech unicorn aggressively moving into cross-functional capabilities, that is, focusing on sales.

Unicorns doing what Unicorns do

  1. Along with the new unicorn raises listed above, current unicorn Seismic announced $170 million Series G putting them at a $3b valuation.
  2. They didn’t just raise money, they announced the acquisition of sales training/readiness vendor Lessonly.
  3. This will not be the last big raise. In Sales Tech Mayhem, the term “raise” has truly taken on a poker meaning. We expect other sales tech vendors to “call” that $3b valuation and “raise” another $1b in valuation (or more).
  4. Nor will this be the last acquisition, M&A activity is clearly a/the major contributor to sales tech mayhem.
  5. Speaking of poker, our bet is by the time our next Sales Tech Mayhem post comes out in the next couple weeks, there will be either a raise or acquisition (probably both).

Sales Enablement Stack Mayhem 

  1. Gartner estimates that revenue in the sales enablement market came to $1.7 billion in 2020, an increase of approximately 12.1% over the prior year.
  2. Relative to the overall category of sales, which was down to 10.9% growth, sales enablement is a high-growth segment within the overall sales category.
  3. Both data points above via Market Guide for Sales Enablement Platforms (Gartner subscription required).
  4. There are now 4 unicorns in the sales enablement market alone.
  5. 3 unicorns in the sales enablement platform space – Mindtickle, Highspot, and Seismic.
  6. Conversation intelligence has been a game-changer for sales enablement so Gong makes it 4.
  7. That is mayhem. And the drivers for more buying are also pointing “up and to the right”.
  8. The move to virtual/hybrid selling has been a key driver. 94% of organizations have invested or are considering investing in technology to enable virtual selling. That’s basically everybody.
  9. Also, the market is perpetually evaluating their tool set. 68% of organizations are inventorying their tools or technologies every year.

Sales Enablement Audit

More Mayhem is coming from the ground-up: A potential new category is blooming

  1. Venture capitalists are circling around the demo/product experience space. 
  2. As is the case with most early categories, the name of the category is still on the table.
  3. We like when you can explain the category in a few words – automation to support the delivery of the product demo both live and on-demand.
  4. We also like to see a mass of early stage vendors with VCs picking their “horses” in this race.  
  5. Early vendors in the demo/product experience space: Demostack ($13.3m Series A), Navattic ($1.2m Seed), Reprise ($17m Series A), Tourial (Seed – no $ announced), Walnut ($6mm Seed).
  6. Product story-telling is one of the key aspects here. We are crafting stories across the board – in a product-first world, the product has to be presented in a story. Great demos are really opportunities to tell great stories about a solutions’ functionality.
  7. Here is the key to this market – buyers are favorable to demos. Look at the two data points below from the Gartner Technology Buying Dynamics B2B Technology Buyers Survey.
  8. 50% of buyers surveyed cite demos as one of the most valuable materials during the buying cycle. 
  9. 58% of buyers cite “demonstrations” as a call to action they would respond to in a marketing campaign. 
  10. The demo/product experience market serves both “traditional” sales where the demo is a critical play in the sales process. 
  11. And the market is in position for the future where product led growth (PLG) will continue to rise. (PLG is a strategy that generates pipeline and revenue through the use and adoption of compelling product)
  12. Think about product demos delivered automagically throughout a product-led experience without talking to sales because like it or not, that is the growing preference. See below.
  13. 43% of buyers are gravitating to rep-free experiences but here is the kicker, the future looks even more product-led – over half of the next generation of leaders, the millennials, prefer rep-free.

Rep-free experiences

Sales Tech Mayhem rages on.

See you in our next update!

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