COVID-19 Update

Demandbase CEO Discusses Future Growth, Competitive Landscape Following Latest Round Of Funding

Featured Demandbase CEO Discusses Future Growth, Competitive Landscape Following Latest Round Of Funding

Demandbase recently closed $65 million in funding to fuel the growth of its platform, highlighting that investors in the B2B tech landscape see massive potential in how these types of solutions can positively impact marketing initiatives.

In an interview with Demand Gen Report, Demandbase CEO Chris Golec discussed the expansion of the ABM landscape. Golec also shared his thoughts on the importance of integrating ad, marketing and sales tech for better ABM, the future of the company and the trends that will have an impact on ABM in the coming future.

Demand Gen Report: ABM as a category has expanded greatly over recent years, both in terms of adoption and also the number of solution providers. Do you think this expansion is a good thing for Demandbase and its future growth?

Chris Golec: ABM itself has been in practice for dozens of years, but it was more of a business process and there wasn’t really technology available to do it at scale, and so it’s really taken off over the last few years and kind of gone beyond becoming a hype factor.

We love the fact that there are lots of other ABM players coming in because you can’t have a category with one or two players. And while we have the biggest footprint in a full platform, there are still needs for others in the space and it’s great that there are other niche players coming in.

Typically, there are a lot of companies with a feature or a single-point solution that are claiming to be an ABM platform, and while that may not be the case, I still think it’s healthy for the category overall.

We’re also seeing opportunities—we’re going into some of our large enterprise customers and literally training hundreds of people within a single company on account-based marketing. And it’s not just what it is or how to do it; it’s how do we change the measurement tactics of our marketing team? Because if you’re still measuring your team on MQLs, click-through rates or traffic volume, you’re going to be way behind. Companies that are more advanced in doing ABM now are measuring the marketing teams on close rates, deal size, pipeline generation—way more advanced and better aligned with the sales team and what the CEO cares about.

DGR: What does the expansion of ABM mean specifically for Demandbase's future growth?

Golec: The investment community—ranging from VCs all the way up to your growth equity guys—have taken notice of ABM, and they want to make their investment in the space. They do their research, they recognize that Demandbase really pioneered the space and are probably five or 10 times larger than other ABM players out there.

So number one, we just had a ton of inbound interest from the investment community. Second, which transpired over the last nine months, was that we acquired the AI company Spiderbook. We started recognizing that if we apply AI onto these massive amounts of data that we’re sitting on, there are so many more innovation opportunities in front of us. So, it was a perfect alignment of stars around lots of financing interest, huge opportunities to expand our product footprint, bringing a lot more value to our customers and really expand our leadership position in the whole ABM category.

One of the things that’s interesting to note from a comparison standpoint is marketing automation. Most of our customers are probably spending five times the amount on their ABM solution than they are on their marketing automation system, for example, because the impact on the business is so much greater.

ABM really extends beyond email; it’s everything from attracting potentially new accounts, to engaging them and helping close the deals. But it even goes way beyond that because a lot of our customers want to do a much better job marketing to their existing customers. They do that through a variety of means, such as personalized content, advertising, different targeting and different ways to upsell. So, we’re in an interesting position to really connect.

There’s the whole ad and media ecosystem, there’s the whole marketing tech stack, and then you have the whole sales tech stack, which is essentially CRM. Those three worlds are completely different technology stacks and completely different data models. The pricing mechanisms on how they operate are completely different, as well, so we’re bringing those three worlds together and it’s not easy to do. The underlying data model that we’ve built allows us to do that much easier than anybody else out there.

DGR: We've seen Demandbase make some notable acquisitions—such as the data intelligence companies Spiderbook, which you mentioned, and WhoToo—which have helped Demandbase grow its ABM offerings. Are other acquisitions possible in the imminent future?

Golec: Both the acquisitions were for somewhat different purposes and both opportunistic. The Spiderbook acquisition, for example, was brought to us by a customer—frankly—and we started using their technology for our own marketing purposes and really found out that it was 10 times better than anything else that we had used in that kind of AI/predictive world. They were about to get funding, and so we said, rather than raise all that money to build a sales marketing operation we already have, it was opportunistic and a very good fit at the time.

There’s not a specific gap in our platform that we’re looking to fill by acquisition right now. I would say we’re continuing to build and expand our products. However, we always keep our ears open for additional intellectual property, or even valuable data that would be hard to obtain or take us a long time to build ourselves. We’re always looking for highly valued proprietary data assets or technologies that can extend into all our products. But there’s not a specific category where we’re doing research on right now, so we’ll continue to look at M&A from a strategic and opportunistic standpoint.

DGR: This latest round of funding brings Demanbase's total equity funding to more than $150 million—some could say IPO territory. Is there a possibility of an IPO in Demanbase's imminent future?

Golec: There was a good stat that I saw; I think Forbes did with Bessemer [Venture Partners]. They looked at 100 cloud companies that were either public or on their track, and 95% of those 100 companies had raised over $200 million—which was kind of jaw dropping. So, certainly the additional capital we have in place takes us well into IPO territory, and we are already tracking cash flow breakeven, so the additional capital will increase some investments in certain areas. You know, there’s a lot of firepower there to carry it for years and years, whether we go public or not.

DGR: What else can we expect from Demandbase in the coming months?

Golec: This summer, and in the second half of this year, you’ll see Demandbase begin to really roll out a lot more AI-based functionality into its offerings—from our data to a lot of the products, both from advertising, marketing and sales. We started doing that with some AI-based personalization, but you’re going to see a lot more.

The second piece that’s one of the most exciting, especially for our customers, is a lot more automation across the stack, meaning a world where your tech stack adds a company to the sales pipeline and then that company automatically starts getting advertising for that particular product in real-time. The whole website is personalized to that product, and then it turns off when it closes. Or the company coming up for renewal next quarter automatically starts receiving messages around the product that should be upsold into that company.

Again, this is all automated across your CMS system, the whole ad ecosystem, marketing automation and all the way into your CRM. So, to do that effectively, you really must join those three worlds I talked about. You can’t do it unless you have a data infrastructure that allows you to connect all those worlds easily. Fortunately for us, we built the foundation around network IP address, so that gives us the foundation to do that. You’ll also see us adding layers on top of that IP foundation so that we can get much richer insights on what type of personas they have and what their real-time interests are. I think that will take our products in the entire platform to a whole new level, as well.