Marketing analytics startups Radius and Leadspace are merging to beat out Salesforce

Radius

Radius CEO Darian Shirazi, left, and Leadspace CEO Doug Bewsher

• Two competing startups in the marketing and sales intelligence space have decided to merge.
• Radius and Leadspace are combining products and teams to better compete with Salesforce.
• Leadspace CEO Doug Bewsher will become the chief executive of the combined company, while Radius CEO Darian Shirazi will become its executive chairman.

A pair of startups is teaming up up to take on Salesforce.

Radius and Leadspace are planning to merge to better compete with the cloud giant's Einstein product in the world of marketing and sales analytics. The combined company will operate under the name Radius, but will rely heavily on the products and customer bases of both firms.

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"We're excited about this because it will create the largest number of customers, largest revenue base and really provide a company that is at scale in B2B data and intelligence," said Radius CEO Darian Shirazi, who's set to become executive chairman of the combined company when the deal closes.

"The only other major player in this space we believe is Salesforce Einstein, and we're excited to really give them a run for their money," he said.

Radius has historically worked with US companies such as Sam's Club and MetLife to help them reach potential customers. Leadspace, meanwhile, uses its global footprint and artificial intelligence to help customers including Microsoft and Hewlett Packard Enterprise connect with other businesses.

"Leadspace and Radius fit very nicely together. We actually both have the same vision in terms of bringing data intelligence to B2B sales and marketing organizations," said Leadspace CEO Doug Bewsher, who will become CEO of the combined company.

Shirazi and Bewsher declined to share the terms of the deal, but they insisted that the combined value will be "big."

Radius was last valued at more than $500 million in 2015, which Shirazi confirmed to Fortune at the time. Leadspace has never publicly disclosed its valuation, but the company had raised a total of $59 million as of late last year.

"It's reasonable to think there could be an IPO in the next couple of years," Shirazi said.

The new Radius has close ties to its big rival, Salesforce

While Shirazi and Bewsher have set their sights on beating out Salesforce, both CEOs have links to the cloud giant.

Before heading Leadspace, Bewsher was Salesforce's chief marketing officer. Meanwhile, Salesforce Ventures invested in Radius, and the startup's service can be deployed within Salesforce's platform.

But both Shirazi and Bewsher's experiences go beyond Salesforce.

Shirazi started out as an intern on the engineering team at eBay before joining Facebook as one of its first 10 employees. He left after three years to start his freshman year at UC Berkeley but didn't stay long before moving on to other startups. He founded Radius in 2013.

Bewsher held a series of executive-level marketing roles before settling down at Leadspace. The company was founded in Tel Aviv in 2007 as part of what Bewsher calls "the NSA of Israel."

As CMO at both Skype and Salesforce, Bewsher got a sense of what the marketing world needs - and what he believes the biggest players in the space are getting wrong.

"While a company like Salesforce has done some work in terms of trying to help customers figure out how this market is going to evolve, a deal like ours is going to really help solidify that," Bewsher said. "We're really excited about how this is going to shape the whole data intelligence market."