G2 raises a $55M More to $100M
G2 Crowd, a peer-to-peer review site for business apps and software, today announced that it has raised a $55 million round of financing led by IVP Capital. Existing investors Accel and Pritzker Group Venture Capital, also joined the round, as well as new investor Emergence Capital.
This brings the total amount of money raised by the Chicago-based company to $100 million.
Launched in 2012, G2 Crowd is led by current CEO and cofounder Godard Abel, a two-time enterprise software entrepreneur. His first company, a cloud-based price-quoting provider called Big Machines, was acquired by Oracle in 2013 for about $400 million. His second, a price-quoting software provider for sales reps called SteelBrick, was acquired by Salesforce for $360 million in 2015. He stepped down temporarily from his role as G2 Crowd’s CEO to help integrate SteelBrick into Salesforce and then resumed the position in June.
Though Abel describes G2 Crowd as a Yelp for enterprise software, he says it is seeking to disrupt traditional analyst companies, namely Gartner. G2 Crowd was born out of Abel’s frustration at his previous two companies over how long it would take analysts to update their briefings.
“Frankly, I think the legacy model of one analyst trying to cover a space doesn’t work anymore,” Abel told VentureBeat in a phone interview, citing the fact that younger office workers are already more inclined to turn to search engines than analyst briefings to get up to speed on new products. Additionally, with startups now creating enterprise or cloud services for specific departments within a company, businesses have more new software than ever before to sort through. Gartner evidently sees the value proposition of peer-to-peer review sites, having acquired G2 Crowd competitor Capterra in 2015.
The problem with creating review site business software is that without proper guardrails companies are going to write glowing reviews of their own products or trash their competitors. So users have to be verified by G2 Crowd with their LinkedIn account in order to write a review. (LinkedIn invested in G2 Crowd last year.)
To ensure people aren’t using fake LinkedIn accounts, G2 Crowd also checks for things like the date the account was created and how many connections it has at the company where the person profiled claims to be working. Syncing up with LinkedIn also allows people to see if a review is coming from someone who works at a company that’s the same size or within the same industry as them.
Verified users have so far written more than 500,000 reviews for 56,000 products on G2 Crowd, ranging from Slack to QuickBook to MailChimp. Users can also add screenshots or videos walking through how they use the product.
Writing or viewing reviews is free, but G2 Crowd makes money by offering marketing add-ons to vendors. The company said 1,200 of the 56,000 products reviewed on G2 Crowd have a paid “premium profile,” meaning the company can add its own videos and content to the profile page, as well as getting additional metrics on the types of people viewing the profile.
G2 Crowd was ranked 179th on Inc Magazine‘s annual list of the 500 fastest-growing private companies in the U.S. In 2017, G2 Crowd’s revenue was $11.1 million, up 2,414 percent since 2014.
Abel said G2 Crowd plans to use its new financing to expand to Europe and Asia, starting with Japan.
The company currently has 210 employees between its Chicago and San Francisco offices, with the majority located in Chicago.
From G2 blog, We’re excited to announce our $55 million Series C funding round led by IVP, with participation from Emergence Capital, as well as returning investors Accel and Pritzker Group– bringing our total funding to date to $100 million.
IVP, Emergence, Accel, and Pritzker are all world-class venture firms, especially in the B2B enterprise technology space. Their partnership with G2 Crowd is an incredible validation of what we’re trying to build. The G2 Crowd Rocketship is on an incredible trajectory, and our extraordinary growth and traction to date is a testament to the hard work of our team and support of our community.
We’re also thrilled to welcome IVP’s Jules Maltz to our entrepreneurial family and our board of directors. Recently named one of the top 100 venture capitalists in the world in the 2018 Forbes Midas List, Jules has invested in some of the fastest-growing businesses in enterprise software including Dropbox, Slack, and SteelBrick.
“When it comes to marketplaces, in today’s business climate it’s winner takes all. What Amazon is for consumers, G2 Crowd is becoming for businesses: the place to discover and buy the best business solutions.”
Jules Maltz Investor, IVP
Building The Rocket: Our Growth To Date
My co-founders and I started G2 Crowd because we loved working together, and we wanted to build a meaningful company that would help other entrepreneurs and innovators thrive – and reach their potential.
Six years later, and we are proud to have helped more than 23 million business buyers find the right software and services for their companies. We’re also lucky to be able to call some of the fastest-growing and most innovative companies in the world our customers.
From small businesses, to large enterprises like Nike and Facebook, companies trust G2 Crowd to discover and buy the solutions that will help them achieve their own visions.
User reviews, and the data that comes with them, are the engine that drives the insights we provide business buyers. We hit a huge milestone just a few weeks ago when we verified our 500,000th review – more than doubling our count from a year ago. For context, that’s more than 18 million data points for more than 58,000 products and services across nearly 1,200 solution categories.
For businesses to reach their potential, they need product recommendations built upon data they can trust – and we take that responsibility seriously. We publish our community guidelines and our scoring methodologies so that our processes are always transparent.
It’s hard to believe where we are now when I think about where we’ve come from. From just five guys with an idea, to a one-room office in suburban Highland Park, to now more than 200 employees in our Chicago and San Francisco offices, G2 Crowd has grown through hard work from talented and innovative people.
In the past year we’ve welcomed key members to our entrepreneurial family – including myself and CRO Matt Gorniak back from Steelbrick after its acquisition by Salesforce, as well as CMO Ryan Bonnici and new board member Megan Eisenberg.
The Rocket is Fueled Up: So Where Are We Heading?
As we embark on this exciting new growth stage, we want to not only help businesses discover the best tools for their business, but also enable them to buy, manage, and optimize these tools.
Over the next few years, we plan to become a true marketplace.
What buyers are telling us is that they don’t just want to use G2 Crowd to discover the best solutions for their businesses – they also want us to help them run the RFP process, as well as the purchasing and management of their solution spend.
- We plan to continue our incredible hiring momentum, including a 500% headcount increase at our Chicago and San Francisco offices, as well as overseas. To that end, we’re hiring on nearly every team at G2 Crowd.
- We are constantly working to grow our user community, gather more reviews, develop deeper insights, and diversify our solution category coverage in emerging industries. Our team is already hard at work on some exciting initiatives – stay tuned!
We are keenly aware that we could not have come this far or reached this point without you. To our entire crowd, thank you! Thank you for believing in our mission and our movement, and supporting us along our journey. We’re excited to step into the next chapter with you.
We’re just getting started.