The CEO who raised millions with just one 'cocky' slide landed another $65 million - and his company is now worth half a billion dollars
- Hot Seattle startup Outreach has raised another $65 million, bringing its total investment to $125 million at about a $500 million valuation, CEO Manny Medina told Business Insider.
- This is another moment of triumph for Medina, a former Amazon Web Services and Microsoft exec.
- This startup, his first, was on the verge of bankruptcy just a few years ago until the team's determination caused them to accidentally create a product that turned out to be a big hit.
- Sales grew so rapidly that he convinced VCs to invest millions with one "cocky" slide, he said.
Outreach, a Seattle startup that offers software to help salespeople automate their work, has just raised another $65 million.
That brings its total investment to $125 million. Investors have now valued the company at about $500 million or "half a unicorn, the back half" CEO Manny Medina joked to Business Insider.
Medina is known as a high-energy, cheerful leader who has memorized every employee's name, he says, and spends the first hour of the workday fist-bumping every employee in the office - even though the company is now 300 employees strong, double from a year ago, albeit not all of them work in the Seattle headquarters.
He's got reason to be happy. Back in 2015, his company was on the verge of bankruptcy. In those days, his startup offered HR recruiting software that wasn't selling well. In an all-out effort to save the company, he and his team went on a sales frenzy and built a work-flow app to automate the cold-calling process. The app allowed the three sales folks to spend less time digging up leads and writing initial emails, and more time in actual meetings.
The customers at those meetings still didn't want the HR tool, but they did want the automatic cold-calling app. So the company changed course and turned that home-grown tool into a product, quickly booking $1 million in sales.
When his cofounders pushed him to find some investors, Medina did so begrudgingly, he previously told Business Insider. Running a business, the old-fashioned way based solely on sales, made him "very cocky."
"When you have a survivor mentality, you feel like, 'I don't need your money,'" he said.
"I had one slide. It was a chart," he said, describing his talks with VCs. "I said, 'This is our revenue growth chart. We sell to salespeople. Any questions?'" he described.
Sales were coming in so rapidly that halfway through the VC meeting, he would refresh the slide, and the sales numbers would jump. The company had zoomed from $1 million to $10 million under contract just two years after almost going bankrupt.
That single slide landed the company a $2.3 million seed round, and later, the same slide landed another $9.2 million.
He then went on to raise more substantial rounds. The latest one was led by Spark Capital with participation from a new investor, Sapphire Ventures, the VC arm of enterprise software giant SAP. Existing investors DFJ Growth, Four Rivers Group, Mayfield, MHS Capital, Microsoft Ventures and Trinity Ventures also participated.
Medina is now positioning Outreach and his competitors as the next giant market after Salesforce - the dominant player in sales software - with customer relationship management (CRM) software. CRM is software that keeps track of customers.
"It's not going to be a new CRM that displaces CRM, but something new," he said. He calls this next thing "sales engagement" because it does more than just store lists of contacts, and actively helps salespeople handle more tasks.
VCs are apparently agreeing with him. Other sales automation tools are raising big bucks as well, Medina points out, including InsideSales, which has raised about $300 million (and is being watched for signs of an IPO) and Intercom, which has raised about $240 million.
Medina no longer uses the single "cocky" slide when raising money, but he did share it with us. It shows one metric: the company's monthly recurring revenue ("MRR").
