Yahoo Finance Crossbeam lands $76M Series C as network effect fuels partner cloud growth
Crossbeam founder and CEO Bob Moore founded his startup to help companies building sales partnerships understand their overlapping accounts, using a process called account mapping. He knew that eventually the company would benefit from a network effect as customers attracted other partners to the network. As that vision has come to fruition, it has caught the attention of investors and today the company announced a $76 million Series C.
Andreessen Horowitz led the round, with participation from prior round lead investors Redpoint Ventures, FirstMark Capital, First Round Capital and Uncork Capital, along with Salesforce Ventures, HubSpot Ventures and Okta Ventures. The company has now raised almost $117 million with today's investment, according to Crunchbase data.
Moore says that the network effect was what is attracting investors and it provides an easy way for the company and its investors to measure success by looking at the network graph. "So all the ways that we think about if the business is working and how we measure success tends to revolve around the growth in this network graph and how many new companies are coming on board," he said.
That's because many of these companies joined because they were recruited by other companies. They also can look at how deeply engaged they are in terms of using the platform and how they are collaborating across company lines, he explained. When you look at the growth from inception today, you can see that.
Image Credits: Crossbeam
Further, over the last year, they have been attracting much larger companies, which has grown the network even faster. "One of the biggest changes in the last year is that we started landing very large enterprise accounts that have these really amazing ecosystems that almost serve as their own centers of gravity [in the partnership graph]," he said.
He says that early on they were selling to partner teams, but now they are also moving into sales and marketing and that's helping feed valuable data into systems like Salesforce and HubSpot (which not coincidentally are also investors). "That wider interest is driven by these integrations into products like Salesforce and HubSpot and Slack where the data can flow into where people are doing their work and actually allow them to get the answers to these questions and measure where the impact is coming from in their partner ecosystems."
In fact, it's only when companies start putting Crossbeam data to work that they start paying. "We have a freemium model, so you can join for free, you can have unlimited partners for free and you can connect all your data for free. The point at which you start paying is when you want to take the data that you've been able to acquire through Crossbeam and have it exit the Crossbeam system and go out into another platform [like Salesforce]," Moore said.
So far that network has grown to 5,000 companies. He says that about 20% of participants have become paying customers, which is a pretty standard ratio. Today, the company has around 65 employees, with plans to get to 80 by the end of the year.
When we spoke to Moore at the time of the company's $25 million Series B in August 2020, he talked about diversity and inclusion as part of the entire recruiting process and the culture he and the executive team are trying to create at the company -- and he says that has continued as the company has grown.
"We talk about it openly and regularly in our executive team meetings. We have a diversity, equity and inclusion committee internally that is responsible for internal cultural efforts and checks and balances on all of our own processes, which is made up of a diverse array of employees. I think the bottom line is that our diversity numbers and representation among all ranks of the company has held up or gotten even better since the time of the Series B," he said.
He adds that even in a tight employment market, they have been able to attract talent because people want to work at a company that is growing quickly and attracting investors as Crossbeam is.
"We're a B2B company that feels almost like a consumer business in some ways because of all these network effects…and we have a great story to tell and the company is growing very rapidly. We have amazing investors and it shows in the data and we're very transparent culturally about how things are going," he said.
