Crossbeam Pulls In $25M Series B Financing
PHILADELPHIA, PA, Crossbeam has raised $25 million in a new Series B round, less than two years after it was founded.
According to Crossbeam, which makes a Software-as-a-Service platform that allows companies to securely share data to build or improve inter-company partnerships, has now raised $40.8 million to date.
The new round was led by Silicon Valley-based Redpoint Ventures and joined in by Crossbeam's existing array of high-profile investors, Firstmark Capital, both Salesforce's and Slack's venture funds and Uncork Capital. Identity and access management tech firm Okta's venture arm participated in the round as well.
The company wasn't originally planning to raise a Series B so soon, CEO Bob Moore said, but Redpoint reached out in mid-June and said it had watched Crossbeam's growth in the market, and wanted to lead its next round.
"Everything happened really fast," he said. "By the end of June, we figured out it was something we wanted to do. It took a month or so to piece together, and we just closed last weekend."
Along with the funding -which will allow Crossbeam to roughly double its current staff of 28 in the next six months - the company is also making the basic paid tier of its platform, previously $500, free.
Both moves are designed to pour lighter fluid on the fire that's already driving Crossbeam's rapid growth, the network effect.
Crossbeam works by putting a company's data it normally wouldn't share with prospective partners into a kind of escrow that protects the data. Its customers are then able to use Crossbeam's software to learn more about what customers or prospective customers it has in common with a partner, allowing them to better coordinate sales strategies and workflows.
As more companies sign on to Crossbeam, Moore said they encourage their other partners not on the platform to join so they can gain insights into those relationships as well. When Crossbeam raised its $12.5 million Series A last August, it had 145 companies on board. It now has 947.
"What you see there is this incredibly compounding growth coming as a result of this network effect," he said.
One of the most encouraging signs for Moore is how much Crossbeam's customer base has expanded beyond the VC-backed tech companies that were its "bread and butter" leading up to its Series A.
"It's not just hip startups using it," he said. "There's publicly traded companies using it, companies in different industries using it, companies of all different sizes using it."
Making the basic tier free will make it easier for those larger companies to convince smaller partners to join the platform, he said. The goal is to increase the value of it to paying clients and fuel more network growth.
Data-fueled software products like Crossbeam are commonplace in other business areas, as SaaS tools have changed the way human resource professionals, salespeople and customer service representatives work. (Think of companies like ADP, Salesforce and Zendesk.) Employees who manage inter-company partnerships haven't seen the same level of innovation, since companies' unwillingness to share customer data directly with other outsiders has always been a roadblock. As a result, most partnership work is done through sending spreadsheets back and forth and one-on-one interactions that are hard to scale, Moore said.
In looking to overcome the roadblocks, Crossbeam is potentially in the position to become the main operating system for inter-company collaboration, he said.
Moore thinks one of the reasons Crossbeam has caught on so quickly is because it solves such a specific problem, one that he faced repeatedly when co-founding and leading his past two startups, RJ Metrics and its spinout Stitch, to exit.
"I have wanted this product for the past five years," he said. "If this product would have existed, it would have made my life better."
It also helps that this is Moore's third time in the co-founder seat, he said, since he now has 10 years of operational experience and is more willing to be more honest about what he doesn't know, recognize his weaknesses and hire against them.
"We had to do less of running into walls and picking yourself back up," he said. "We've instead been able to really run the playbook of what it looks like to be a venture-backed, scaled company in its early stage.'
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