OwnBackup reels in $240M Series E on $3.35B valuation, up from $1.4B in January

Published August 10, 2021

OwnBackup, the late-stage startup that helps companies in the Salesforce ecosystem back up their data, announced a $240 million Series E today at a $3.35 billion valuation. The latter is up from $1.4 billion in January when the company announced a $167.5 million Series D.

Alkeon Capital and B Capital Group co-led today’s investment, which also included BlackRock Private Equity Partners and Tiger Global along with existing investors Insight Partners, Salesforce Ventures, Sapphire Ventures and Vertex Ventures. The company has now raised close to $500 million, with more than $455 million coming since last July.

That’s a lot of capital, but OwnBackup CEO Sam Gutmann says that as the Salesforce ecosystem has grown, which includes not only Salesforce itself, but companies like Veeva and nCino, business has been booming, growing 100% year-over-year since 2018. That kind of growth gets investor attention, and Gutmann reported a lot of inbound investor interest in this round.

What’s more, the company announced that it will now support the same type of backup for Microsoft Dynamics 365 customers, thereby greatly expanding its potential market. “We’re also announcing that we are expanding into the Microsoft ecosystem specifically around Microsoft Dynamics 365’s huge ecosystem. I think it’s the second-largest B2B SaaS ecosystem beyond Salesforce. We’re just getting started there, but super excited about the opportunity,” he said.

The company also sees the opportunity to grow the business through acquisition. Over the last year, it bought two small companies, but he says that was more focused on acquiring specific talent to develop the platform, while future acquisitions could be more focused on expanding the business itself.

As the company takes on this kind of investment, Gutmann sees an IPO possibility at some point in the future, but for now he’s concentrating on growth. “We’re not focused on exiting. We’ve really focused on developing what is already a huge market and growing into an even bigger market, continuing to expand with a business that has great unit economics and continues to grow nicely,” he said.

The company has ballooned to 500 employees this year, with plans to double that number in the next year. As he does that, Gutmann says that hiring in general is challenging, but he is always looking to find ways to diversify his workforce. “It’s really, really hard. Our hiring managers definitely focus on [diversity], but at the end of the day, we want the best employees for the job. I think we’ve made a lot of strides. We’re working with one of our largest investors, Insight, who is co-sponsoring a program to train, more on the junior side, some underrepresented minorities in technical fields and bring them on as full-time employees after that program,” Gutmann said.

Gutmann says his offices have remained open throughout the pandemic, but nobody was required to come in. In fact, he says that his company is one of the few that has actually added office space to make it easier to distance. The company, which is located in New Jersey, has also expanded space outdoors for working outside when the weather permits.

How 2 startups scaled to $50M ARR and beyond

Plastiq raises $75M to help small businesses use credit cards more

Published March 25, 2020

When Eliot Buchanan tried to use his credit card to pay his Harvard tuition bill, the payment was rejected because the university said it doesn’t accept credit. Realizing the same problem exists for thousands of different transactions like board, rent and vendor payments, he launched Plastiq. Plastiq helps people use credit cards to pay, or get paid, for anything.

Plastiq today announced that it has raised $75 million in venture capital in a Series D round led by B Capital Group. Kleiner Perkins, Khosla Ventures, Accomplice and Top Tier Capital Partners also participated in the round. The round brings the company’s total known venture capital raised to more than $140 million.

To use Plastiq, users enter their credit card information on Plastiq’s platform. In return, Plastiq will charge you a 2.5% fee and get your bills paid. While Plastiq was started with consumers in mind, SMBs have now accounted for 90% of the revenue, according to Buchanan. The new financing round will invest in building out features to give SMBs faster services around payments and processing.

Plastiq provides a way for SMBs and consumers to pay their bills and make sure they have reliable cash flow. For example, restaurants sometimes have a drop in revenue due to seasonality or, as we’re experiencing now with COVID-19, pandemic lockdowns. Or tourism companies for cities that are struggling to attract visitors. Those companies still need cash flow, and using Plastiq’s service, they can use credit cards to pay suppliers even in an off season.

There is no shortage of competition from other companies also trying to solve pain points in small-business cash flow. According to Buchanan, Plastiq’s biggest competitors are traditional lenders, as well as companies like Kabbage and Fundbox. Similar claims could be made about Brex, which offers a credit card for startups to access capital faster.

Kabbage provides funding to SMBs through automated business loans. The SoftBank-backed company landed $200 million in a revolving credit line back in July, fresh off of landing strong partnerships with banks and giants like Alibaba to access more customers. Kabbage loans out roughly $2-3 billion to SMBs every year.

Plastiq, according to its release, is also on track to make more than $2 billion in transactions. But unlike Kabagge, Plastiq doesn’t issue loans or credit, it just unlocks a payment opportunity.

“SMBs don’t need to be burdened with additional debt or additional loans,” Buchanan said. “So rather than trying to reinvent the wheel, let’s use a behavior they have already earned.”

Buchanan would not disclose Plastiq’s current valuation or revenue, but he did say that it’s not too far away from $100 million in revenue run rate. The company’s revenue has grown 150% from 2018 to 2019.

The company also noted that it has surpassed “well over 1 million users,” up 150% in unique new users from 2018 to 2019.

In terms of profitability, Buchanan said that “we could be profitable if we wanted to be,” noting that Plastiq’s revenue and margins could lead them toward profitability if they wanted to focus less on growth. But he added they don’t plan to “slow down” the growth engine any time soon — especially in the wake of the COVID-19 pandemic.

Because the Series D round closed at the end of 2019, Buchanan said the pandemic did not impact the deal. However, the company had planned to time the announcement with tax season. Now, as small businesses struggle to secure capital and stay afloat due to lockdowns across the country, Plastiq’s new raise feels more fitting.

“Our customers are more thankful for solutions like ours as traditional sources of lending are drying up and not as easy to access” Buchanan said. “Hopefully, we can measure how many businesses make it through this because of us.”

The 140-person company is currently hiring across product and engineering roles.