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Affinity, a relationship intelligence company, raises $80M to help close deals
Relationships ultimately close deals, but long-term relationships come with a lot of baggage, i.e. email interactions, documents and meetings.
Affinity wants to take what Ray Zhou, co-founder and CEO, refers to as “data exhaust,” all of those daily interactions and communications, and apply machine learning analysis and provide insights on who in the organization has the best chance of getting that initial meeting and closing the deal.
Today, the company announced $80 million in Series C funding, led by Menlo Ventures, which was joined by Advance Venture Partners, Sprints Capital, Pear Ventures, Sway Ventures, MassMutual Ventures, Teamworthy and ECT Capital Partners’ Brian N. Sheth. The new funding gives the company $120 million in total funding since it was founded in 2014.
Affinity, based in San Francisco, is focused on industries like investment banking, private equity, venture capital, consulting and real estate, where Zhou told TechCrunch there aren’t customer relationship management systems or networking platforms that cater to the specific needs of the long-term relationship.
Stanford grads Zhou and co-founder Shubham Goel started the company after recognizing that while there was software for transactional relationships, there wasn’t a good option for the relationship journeys.
He cites data that show up to 90% of company profiles and contact information living in traditional CRM systems are incomplete or out of date. This comes as market researcher Gartner reported the global CRM software market grew 12.6% to $69 billion in 2020.
“It is almost bigger than sales,” Zhou said. “Our worldview is that relationships are the biggest industries in the world. Some would disagree, but relationships are an asset class, they are a currency that separates the winners from the losers.”
Instead, Affinity created “a new breed of CRM,” Zhou said, that automates the inputting of that data constantly and adds information, like revenue, staff size and funding from proprietary data sources, to assign a score to a potential opportunity and increase the chances of closing a deal.
Affinity people profile. Image Credits: Affinity
He intends to use the new funding to expand sales, marketing and engineering to support new products and customers. The company has 125 employees currently; Zhou expects to be over 200 by next year.
To date, the company’s platform has analyzed over 18 trillion emails and 213 million calendar events and currently drives over 500,000 new introductions and tracks 450,000 deals per month. It also has more than 1,700 customers in 70 countries, boasting a list that includes Bain Capital Ventures, Kleiner Perkins, SoftBank Group, Nike, Qualcomm and Twilio.
Tyler Sosin, partner at Menlo Ventures, said he met Zhou and Goel at a time when the firm was looking into CRM companies, but it wasn’t until years later that Affinity came up again when Menlo itself wanted to work with a more modern platform.
As a user of Affinity himself, Sosin said the platform gives him the data he cares about and “removes the manual drudgery of entry and friction in the process.” Affinity also built a product that was intuitive to navigate.
“We have always had an interest in getting CRMs to the next generation, and Affinity is defining itself in a new category of relationship intelligence and just crushing it in the private capital markets,” he said. “They are scaling at an impressive growth rate and solving a hard problem that we don’t see many other companies in the space doing.”
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AvePoint to go public via SPAC valued at $2B
AvePoint, a company that gives enterprises using Microsoft Office 365, SharePoint and Teams a control layer on top of these tools, announced today that it would be going public via a SPAC merger with Apex Technology Acquisition Corporation in a deal that values AvePoint at around $2 billion.
The acquisition brings together some powerful technology executives, with Apex run by former Oracle CFO Jeff Epstein and former Goldman Sachs head of technology investment banking Brad Koenig, who will now be working closely with AvePoint’s CEO Tianyi Jiang. Apex filed for a $305 million SPAC in September 2019.
Under the terms of the transaction, Apex’s balance of $352 million plus a $140 million additional private investment will be handed over to AvePoint. Once transaction fees and other considerations are paid for, AvePoint is expected to have $252 million on its balance sheet. Existing AvePoint shareholders will own approximately 72% of the combined entity, with the balance held by the Apex SPAC and the private investment owners.
Jiang sees this as a way to keep growing the company. “Going public now gives us the ability to meet this demand and scale up faster across product innovation, channel marketing, international markets and customer success initiatives,” he said in a statement.
AvePoint was founded in 2001 as a company to help ease the complexity of SharePoint installations, which at the time were all on-premise. Today, it has adapted to the shift to the cloud as a SaaS tool and primarily acts as a policy layer enabling companies to make sure employees are using these tools in a compliant way.
The company raised $200 million in January this year led by Sixth Street Partners (formerly TPG Sixth Street Partners), with additional participation from prior investor Goldman Sachs, meaning that Koenig was probably familiar with the company based on his previous role.
The company has raised a total of $294 million in capital before today’s announcement. It expects to generate almost $150 million in revenue by the end of this year, with ARR growing at over 30%. It’s worth noting that the company’s ARR and revenue has been growing steadily since Q12019. The company is projecting significant growth for the next two years with revenue estimates of $257 million and ARR of $220 million by the end of 2022.
Image Credits: AvePoint
The deal is expected to close in the first quarter of next year. Upon close the company will continue to be known as AvePoint and be publicly traded on Nasdaq under the new ticker symbol AVPT.
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LA’s consumer goods rental service, Joymode, sells to the NYC retail investment firm, XRC Labs
After raising $15 million in financing from one of technology’s most successful global investment firms, the Los Angeles-based consumer goods rental company Joymode is selling itself to an early-stage retail investment firm out of New York, XRC Labs.
Joymode’s founder Joe Fernandez will continue on as an advisor to Joymode as the company moves to pivot its business to focus on retail partnerships.
The relationship with XRC Labs’ Pano Anthos began after a small pilot integration between Joymode and Walmart launched in late 2019. “[It] became obvious that we should go all in on retail partnerships,” according to Fernandez. And as the company cast about for partners to pursue the strategy, Anthos and his firm, XRC, kept being mentioned, Fernandez said.
The precise terms of the deal with XRC Labs were undisclosed, but Joymode will become a wholly owned business of XRC and could potentially return to market to raise additional funds from additional investors, according to Fernandez.
“We could never crack growth at the scale we needed,” said Fernandez of the company’s initial business. “From day one, my belief was Joymode was going to be huge or dead. We grew, but given the cost structure of our business it put a lot of pressure on the business to grow exponentially fast. Everyone loved the idea but the actual growth was slower than we needed it to be.”
Though Joymode wasn’t a success, Fernandez said he can’t fault his investors or his team. “We got to iterate through every possible idea we had. Literally every idea we had was exhausted… We failed and that’s a bummer, but we got a fair shot,” he said.
What remains of the company is an inventory management system on the back end and a service that will allow any retailer to get involved in the rental business going forward.
“Part of the thesis was that by making things available for rental, people would want to do more stuff,” said Fernandez, but what happened was that consumers needed additional reasons to use the company’s service, and there weren’t enough events to drive demand.
“I believe that the inventory management system we made was incredible and it will be a standard for retailers doing rentals going forward,” he said.
As the company turned to retailers, the rental option became a way to generate revenue through additional products. “All the accessories that made the event even better,” said Fernandez. “Add-ons, try before you buy, experiential things that are just much more complete in a retail environment.”
At Joymode, the problem was that the company was owning the inventory, which created a high fixed cost. “We never felt confident with the growth in LA to justify the expense of opening in another city,” Fernandez said. “If we had cracked user acquisition in LA we would have rolled it out in a bunch of places.”
Ultimately, Joymode members saved $50 million by using Joymode to rent products rather than buying them. In all, the company acquired 2,000 unique products — from beach and camping equipment to video games, virtual reality headsets to cooking appliances. On a given weekend, roughly 30,000 products would ship from the company’s warehouse to locations across Southern California.
At XRC Labs, a firm launched in 2015 to support the consumer goods and brand space, Joymode will complement an accelerator that raises between $6 million and $9 million every two years and manages a growth fund that could reach $50 million in assets under management.
For Anthos, the best corollary to Joymode’s business could be the rental business at Home Depot. “Home Depot’s rental business is over $1 billion per year,” Anthos said. “There’s going to be this enormous component of our society and for them renting will be not just a more sustainable but reasonable option. They’re going to want to rent because they don’t want to own it.”
Joymode was backed by TenOneTen, Wonder, Struck Ventures, Homebrew and Naspers (now Prosus).
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