Personal blog of Yzmir Ramirez

Sprinklr has been busy the last few years acquiring a dozen companies, then rewriting their code base and incorporating them into the company’s customer experience platform. Today, the late-stage startup went back to the fundraising well for the first time in four years, and it was a doozy, raising $200 million on a $2.7 billion valuation.

The money came from private equity firm Hellman & Friedman, which also invested $300 million in buying back secondary shares. Meanwhile the company also announced $150 million in convertible securities from Sixth Street Growth. That’s a lot of action for a company that’s been quiet on the fundraising front for years.

Company founder and CEO Ragy Thomas says he sought the investment now because after building a customer experience platform, he was ready to accelerate and he needed the money to do it. He expects the company to hit $400 million in annual recurring revenue by year’s end and he says that he sees a much bigger opportunity on the horizon.

“We think it’s a $100 billion opportunity and our large public competitors have validated that and continue to do so in the customer experience management space,” he said. Those large competitors include Salesforce and Adobe.

He sees customer experience management as having the kind of growth that CRM has had in the past, and this money gives him more options to grow faster, while working with a big private equity firm.

“So what was appealing in this market for us was not just putting some more money in the bank and being a little more aggressive in growth, innovation, go to market and potential M&A, but what was also appealing is the opportunity to bring someone like a Hellman & Friedman to the table,” Thomas said.

The company has 1,000 clients, some spending millions of dollars a year. They currently have 1,900 employees in 25 offices around the world, and Thomas wants to add another 500 over the next 12 months — and he believes that $1 billion in ARR is a realistic goal for the company.

As he builds the company, Thomas, who is a person of color, has codified diversity and inclusion into the company’s charter, what he calls the “Sprinklr Way.” “For us, diversity and inclusion is not impossible. It is not something that you do to check a box and market yourself. It’s deep in our DNA,” he said.

Tarim Wasim a partner at investor Hellman & Friedman, sees a company with tremendous potential to lead a growing market. “Sprinklr has a unique opportunity to lead a Customer Experience Management market that’s already massive — and growing — as enterprises continue to realize the urgent need to put CXM at the heart of their digital transformation strategy,” Wasim said in a statement.

Sprinklr was founded in 2009. Before today, it last raised $105 million in 2016 led by Temasek Holdings. Past investors include Battery Ventures, ICONIQ Capital and Intel Capital.

It’s been four years since TechCrunch published my blog post The SaaS Adventure, which introduced the concept of a “T2D3” roadmap to help SaaS companies scale — and, as an aside, explored how well my mom understood my job as an “adventure capitalist.” The piece detailed seven distinct stages that enterprise cloud startups must navigate to achieve $100 million in annualized revenue. Specifically, the post encouraged companies to “triple, triple, double, double, double” their revenue as they hit certain milestones.

I was blown away by the response to the piece and gratified that so many founders and investors found the T2D3 framework helpful. Looking back now, I think a lot of the advice has stood the test of time. But plenty has also changed in the broader tech and software markets since 2015, and I wanted to update this advice for founders of hyper-growth companies in light of the market shifts that have occurred.

Perhaps the most notable change in the last four years is that the number of playbooks for companies to follow as they sell software has expanded. Today, more companies are embracing product-led growth and a less-formal, bottoms-up model — employees are swiping credit cards to buy a product, and not necessarily interacting with a human salesperson.

Many of the most high-profile, recent software IPOs structure their go-to-market operations this way. T2D3’s stages, by contrast, focus quite a bit on scaling a company’s internal sales function to grow. Indeed, both a product-led and a sales-led approach are viable in today’s growing B2B-tech market.

What’s more, the revenue needed for a software company to go public has increased dramatically in the last four years. This means that software founders need to focus not only on building a scalable product and finding scalable go-to-market channels, but also building a scalable org chart. These days, what is scarce for software founders isn’t money from investors; it’s great human talent.

So in addition to T2D3, my firm and I are now focusing on another founder journey: F2C, or the transition from founder/CEO to CEO/founder. This journey can take many paths, but ideally it starts with the traditional hustle to find early product/market fit.

Sprinklr, the unicorn startup best known for helping customers interpret social signals has been moving into the broader customer experience market in the last year. Today it announced is was hiring a heavy hitter as Chief Operating Officer, bringing in former federal CIO and Salesforce executive Vivek Kundra. He began working at his new position just this week.

Kundra says that he sees a company that is in a good position and poised for growth. It will be part of his job to work with CEO Ragy Thomas to make sure that happens. “When I look at the 1200 customers we have today, I see a massive opportunity to provide technology to change the way [our users] interact with customers,” Kundra told TechCrunch.

He says that, with his background, whether working under President Obama or with Salesforce CEO Marc Benioff, the focus has always been on the customer, however you defined that, whether in the context of delivering government services or selling cloud software.

He said that to achieve that you have to be ruthlessly focused on execution. “Ideas are cheap, but how do you bring them to life in a way that inspires and motivates? I think that’s really important,” he said.

It’s worth noting that Kundra is not the first COO, however. The company hired Tim Page, who was a founder and COO at VCE before joining Sprinklr in 2016. That was apparently not a good fit.

Thomas says that landing Kundra was part of an extensive 9-month executive search where they looked at people who had worked at SaaS companies that had scaled over a billion dollars in revenue, concentrating on Salesforce, Workday and ServiceNow. “If you look at people in the driver’s seat at those companies, there is a finite number of people. Salesforce is a great company and a great partner. That experience is relevant and unique,” Thomas said.

Kundra pointed out that as part of his responsibilities at Salesforce he built a business unit from scratch that included driving adoption for the company’s Government Cloud and other verticals. “Now I have ability to draw on those experiences,” he said.

Firming up the COO position, much like the CFO, is crucial ahead of going public. With the company valued at $1.8 billion in 2016, they would seem to be of sufficient size to make that move, but Thomas wasn’t ready to commit to anything definitive (much as you would expect).

Instead, he talked of building a strong foundation as preparation to become a public company at some point. “It’s a question of when, not if [we go public], but for a company of our size and scale, it’s logical for us to go public. We aren’t talking about when and how, and we are trying to pour a strong foundation [before we do]” he said. Bringing in Kundra appears to be part of that.

 New York marketing tech firm Sprinklr has acquired Portland-based Little Bird, according to Sprinklr founder and CEO Ragy Thomas. Little Bird was founded in 2011 to help researchers quickly find the top experts and influencers on any given subject via Twitter. It raised from Mark Cuban, Jason Calacanis, Oregon Angel Fund and other individual investors $4.8 million in venture capital to build… Read More