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Meet the startup behind UiPath, Confluent, Zoom and Okta’s IPOs 1 week 1 day ago #694

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By Joe Williams and Tom Krazit,

Welcome to Protocol | Enterprise, your comprehensive roundup of everything you need to know about cloud and enterprise software. This Monday: Clari’s revenue clairvoyance, Intel crumbles, and Russian hackers are on a tear.
The secret sauce
A who’s-who list of enterprise tech success stories, including UiPath, Confluent, Zoom, Okta, Couchbase, Medallia and Datadog, all have at least two things in common: blockbuster IPOs and Clari.

Clari helps organizations with the critical but difficult task of forecasting revenue growth. Overall, CEO Andy Byrne says it’s helped 21 startups go public since 2016, including the companies listed above, and also counts large companies like HPE and Workday as customers.

Now, as the company eyes its own IPO, it’s working to expand beyond sales and into other areas of the business like marketing and product renewals — with the ultimate goal of helping businesses sell to their current customers.

“Companies that are raising massive rounds or going public, they’re using our platform to drive more growth, efficiency and predictability,” Byrne told Protocol.
It recently raised $150 million at a $1.6 billion valuation. Those kinds of numbers are nothing new in enterprise tech, but they are still noteworthy given that Clari’s valuation has tripled from its series D round in 2019.
Byrne believes Clari is helping the tech industry think beyond its laser-like focus on annual recurring revenue.

Reaching $100 million in ARR as an enterprise software startup is important. It signals a predictable book of future business and is a strong sign that an IPO is looming, which is why it’s such a key metric for investors.
But Byrne argued it shouldn’t be the only factor in that analysis. Instead, the focus should be on net dollar retention, or the amount of money a company generates from its existing customer base.
“You want to get $100 million ARR … but that vanity metric is super dangerous,” he said.
Byrne claimed Clari helped Qualtrics grow its net dollar retention rate from 120% to 140%. The impact of that leap might seem small at first, he argued, but after several years the real returns begin to show.

“You would say: ‘Oh, that’s 20%, is that really a big deal?’ But if you think about a company that’s running $250 million ARR — and let’s just assume they have no new logo and they just get 40% from their current customer base because they can add more value with more software products — the next year they’re at $350, then they’re at $490, then they’re at almost $700 million three years later,” Byrne added.
Clari is one of many startups gaining traction by helping customers break down data silos between applications and layer on new analytic tools that help predict some future behavior or outcome.

But unlike a multipurpose tool from providers like Databricks that are designed to handle an array of different models, Clari is designed to find one thing: net dollar retention.

“We can track that remaining revenue potential in that account. That’s all real-time instrumentation that we did not have,” said Byrne. “These are aggregations that Clari does … we are aggregating this into one purpose-built system.”
The product works by piecing together information like product usage, customer satisfaction scores and interactions with customer service teams from long-standing systems including the CRM and email, as well as newer applications like Gong and Salesloft.
Clari’s proposition — that it can help uncover secret sales opportunities among an existing customer base — is magic to a CEO’s ears.

Enterprise tech giants have proven over and over again that it’s easier to “land and expand” with your current users than go out and try to get new ones.
And in the world of SaaS, where (theoretically at least) it is easier for customers to switch between providers, understanding what motivates customers to switch as soon as possible becomes more critical.
At this point it seems that every enterprise software startup — at least, the ones being funded — talks about its ability to connect various systems within an IT stack and unearth insights that will transform the future of its customers.

Alongside touting the ability to create “revenue workflows,” Byrne also dropped other industry buzzwords like “low code,” referring to a future product launch that will enable users to more quickly build applications on top of Clari’s data.

Source : preiposwap.com/meet-the-startup-behind-u...zoom-and-oktas-ipos/

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Meet the startup behind UiPath, Confluent, Zoom and Okta’s IPOs 1 week 1 day ago #695

these providers grow their own customer base, they’ll be able to perfect their products to work even better within certain ecosystems.

That’s bound to help the capabilities — like determining future revenue — move beyond marketing buzz to become new technology benchmarks in the world of enterprise software.
But usual disclaimer: Clari, and startups in general, are not alone in this. Industry giants like Salesforce are rushing to make their systems more open to be able to ingest more outside information in the hopes of providing customers with more analytic capabilities.

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Meet the startup behind UiPath, Confluent, Zoom and Okta’s IPOs 1 week 1 day ago #696

Clari helps organizations with the critical but difficult task of forecasting revenue growth. Overall, CEO Andy Byrne says it’s helped 21 startups go public since 2016, including the companies listed above, and also counts large companies like HPE and Workday as customers.

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