#BackedbyBCV: Building the Next Generation
It’s already been a memorable 2016 for Bain Capital Ventures. Thanks to the amazing founders we get to work with, we joined some epic journeys. Some are starting new chapters within broader platforms (Jet.com teamed up with Walmart and BlueCoat joined Symantec) while the next generation of startups #BackedbyBCV are well on their way, from DocuSign and BloomReach to ZenReach and RedisLabs.
With that surge of results and momentum, we closed our new 2016 fund and opened our new SF HQ. But let’s pick up the story a little earlier and introduce ourselves.
Bain Capital started in 1984 as a VC and growth equity fund (early investments included a seed check in Staples). Our results and growth through the 80s and 90s enabled us to build world class private equity, hedge fund, and credit businesses. Bain Capital Ventures was born in 2001 out of a desire to double down on our early stage roots.
Over the past fifteen years, BCV has stayed true to our mission – leverage deep sector expertise, unparalleled Fortune 5000 access and a passionate team of investors to empower talented entrepreneurs, especially in B2B startups. That mission led us to some amazing companies: LinkedIn (NYSE: LNKD), SolarWinds (NYSE: SWI), Survey Monkey, Taleo (Nasdaq: TLEO), Kiva Systems, Rapid7 (Nasdaq: RPD), Ability Networks and TellApart, to name a few favorite alumni.
In 2011, we launched our west coast office. Five years later, 50% of our partners and dollars deployed are here. Our Bay Area team is fired up to help founders harness the full power of the Bain Capital ecosystem. It’s why we host Pulse sessions (bespoke demo days) for CXOs from Staples, Neiman Marcus, RBC, Citigroup and many others. It’s why Jeff Williams joined our team. In short, we love what we do and are excited to write another chapter of our own.
That’s where you come in. Investing in startups is fundamentally about recognizing exceptional talent. The same is true for our own team.
We are looking for 2 exceptional people to join our investment team as associates. One associate will work with our infrastructure software team (Enrique, Salil, Jeff) and the other will work with our application software team (Ajay and Indy). Your mission will be to help us connect with and build another wave of #backedbyBCV companies at the Series A stage. And support those founders on everything from hiring to product strategy. It’s an amazingly dynamic and impactful role.
How do we define exceptional talent?
People from a wide range of backgrounds have become successful venture capitalists and there is no formula. But we do gravitate towards these attributes:
- Analytical experience in a biz ops / finance role, strategy consulting role, etc. You have a foundation in understanding business models and levers for growth.
- Startup experience. You can’t be an empathetic guide if you’ve never been on a similar journey.
- Tireless intellectual curiosity. Young companies operate in a world of unknowns around product, business model and market fit. Being thoughtful and creative about getting to the right answers matters.
- Connectivity. Tech is a deep and wonderful community. You want to embrace and contribute to that community via product deep dives / workshops / dinners / meetups / blog posts / etc.
- Passion. Founders rightfully expect a lot from the VC firms they partner with. Delivering to those standards can require long hours. Your passion for enabling founders will be directly proportional to your impact.
What should you do to connect?
If you’re excited about joining our team, we’d love to hear from you. But instead of using a search firm or an application page on our website, we’d like to take a different approach.
Step 1 – get a warm intro to our west coast team. No cold emails please. Your ability to develop and activate a network is a big part of this role. We’d love to see you showcase that skill.
Step 2 – share an investment idea with us in that intro email. It should cover:
- An investment sector / theme you like and why
- A specific company you’d want to back within that theme (caveat: total funding in that company should be less than $20 million) and what makes it the right bet.
- The long term exit potential for that company.
Step 3 – (for candidates who stand-out in step 1 and 2) in-person meetings with our team.
This is your invitation. We couldn’t be more excited to kick off this search and add 2 great people to our team over the next few months.
Come find us – we can’t wait to meet you.
Ajay, Enrique, Salil, Jeff, Indy and the BCV CA Team!
Bench Strength: Announcing BCV’s Investment in Bench
Earlier today, Bench announced a $16MM round of funding led by Bain Capital Ventures. This is the story of why we invested.
Bench provides fully automated bookkeeping services to small business owners, eliminating the need for designers / architects / dentists / personal trainers to learn bookkeeping themselves.
Exciting stuff right?
Actually it is. Bench saw close to 3X revenue growth last year and already serves thousands of small businesses across the US. When a company can hit that level of scale and growth early in its trajectory, there is a real opportunity to build a new standard.
Growth like Bench does not happen in a vacuum. Every successful startup has to find a tailwind to ride. So what’s the fuel behind the numbers?
Serving a Retooled Economy…
Since the 2001 recession, the growth of sole proprietorships and the “gig economy” has dramatically outpaced W-2s (corporate payroll jobs).
- In 2013, the IRS received 24.1 million 1040 Schedule Cs (the form filed by sole proprietorships), up from 19.7 million in 2003.
- In 2014, they received around 90 million 1099-MISCs (the form filed by contract workers), up by 16.4MM from 2010.
Those numbers represent a structural shift in the US economy. And an opportunity to serve a new and growing class of small business owners.
…Powered by Small Business Owners who want a New Stack…
That post-2001 cohort of small business owners grew up on the internet. They proactively seek out cloud and mobile products that meet their expectations around ease of use. That generational shift is also behind several important companies that collectively represent a new small business tech stack.
The scale of these companies – each serves thousands to millions of accounts – speaks to the potential in becoming a de-facto standard in any slice of that new stack.
…and have Better Data.
Dial back the clock by 5 years. Stripe and Braintree are tiny companies. Square is just starting to scale. Gusto does not exist yet.
Today, electronic revenue collection and online payroll are ubiquitous. IRS regulations have also evolved and now electronic records are allowed and e-filings are the norm. In same time-frame, online banking (and digital bank statements) became pervasive.
In short, all the key inputs and data sources for automated bookkeeping came online in recent years, setting the stage for a service like Bench.
Harnessing those Tailwinds: Great Product…
Every small business owner has to solve bookkeeping somehow in order to file taxes. The status quo involves some combination of in-house records (spreadsheets, receipt bins, etc.), hired bookkeepers (outsourced or part-time or DIY) and maybe software (Quickbooks, Xero, etc.). All those options suffer from 3 major flaws:
- A low cadence of interaction – you only talk to your rent-a-bookkeeper a few times per month.
- Poor visibility – as a business owner, you send receipts off into the ether, but how do those numbers roll up? How are you tracking against plan? What if you need to run your business differently?
- The business owner has to do all the work around organizing and categorizing expenses and would rather spend that time on growing the business itself.
Customers give Bench very high Net Promoter Scores because it obviates all the problems listed above at 25-35% of the cost of a traditional solution. Customers can interact with bookkeepers at any point via chat, SMS and soon, via a mobile app. They can constantly monitor the financial health of their business by logging in. Most importantly, Bench’s backend automates almost all the data entry, expense classification and other manual work. Small business owners get time back in their day.
…and an Awesome Team
Ian, Jordan, Adam and Pavel saw all these trend lines 4 years ago and have gone on a journey that has taken them to thousands of customers and a 230 person team. Ian has personally worked as a small business bookkeeper and deeply understands the pain he is solving for his customers. We are incredibly excited to partner with the Bench team as they continue their journey towards liberating small businesses from bookkeeping!
PS – Bench is hiring: https://bench.co/careers/
Wrike: Weaving the Work Cloud
Today Wrike announced a $15MM Series B round led by Scale Venture Partners. Here are some reflections on how the company has grown in the 1.5 years since BCV led the A round.
I met Andrew, the CEO of Wrike, in the summer of 2013. He had already built Wrike into a company with over 4,000 customers and several million in revenue and he had done it with no institutional capital. And he still found time for side projects like robotics competitions.The depth and range of his talent and drive was immediately obvious.
So we backed him at the A round. In addition to the team, our excitement had a lot to do with customer engagement. Here’s the graphic from my blog post after the Series A funding.
Wrike Stats from September 2013
Read the original post here
Fast-forwarding 1.5 years, the fundamental quality of the product – and the resulting customer engagement – has gone from strength to strength. Over 8,000 accounts now use Wrike!
A big part of the growth has been a new enterprise product, which allows Wrike to be one of the few work management solutions that scales for 100+ person teams. It’s allowed us to serve customers like Adobe, Paypal and Sony. And has led to incredible growth in the past year.
BCV has had incredible success backing companies with bottom-up adoption, from LinkedIn to SurveyMonkey to SolarWinds. Rory O’Driscoll and Scale, having invested in companies like Box and DocuSign, also understand the power and momentum of this groundswell of adoption. Along with DCM, we are backing Wrike to become another important pillar in the new work cloud as they ride someincredible tailwinds in enterprise collaboration.
So congrats to Andrew and the Wrike team on another milestone in an amazing journey. We at Bain Capital Ventures are incredibly proud of you for what you’ve already accomplished, and very excited to support you in the journey ahead.
If you want to join this amazing team, please check out Wrike’s careers page
A Product Roadmap For Up-And-Coming VCs
This is a reblog of my guest post on TechCrunch
Earlier this year, I had the good fortune of becoming the youngest partner at Bain Capital Ventures. (BCV). There’s a lot of work ahead to make sure I make the most of that opportunity and so I find myself reflecting on the personal “product roadmap” that got me here and the “features” I want to double-down on. Perhaps these ideas can be a helpful framework for other up–and–coming investors and to founders who are trying to evaluate the types of VCs they want to work with.
The Rise of Intent-Based B2B Marketing
Earlier today, 6Sense announced a $20MM round of funding led by Bain Capital Ventures. This is the story of why we invested.
When was the last time you went to a restaurant without checking Yelp (founded 2004)? Or booked a hotel without checking TripAdvisor (founded 2000)? Or bought something online without reading customer reviews (likely powered by BazaarVoice, founded 2005)? A generation of business decision-makers has grown up in that world. So why would B2B buyer behavior be any different?
“57% of the purchase decision is complete before a customer even calls a supplier.” – CEB
“67% of the buyer’s journey is now done digitally.” – Sirius Decisions
We’ve all seen the incredible proliferation of marketing technology tools, with close to 1,900 vendors vying for CMO attention. But the vast majority of these are about instrumentation and optimization of the minority of the buyer journey – your own web site. What about the other two-thirds? That is probably the biggest unanswered question in B2B marketing and sales today.
Our search for transformative solutions to this problem led BCV to Amanda Kahlow, Viral Bajaria and the 6sense team. Their proprietary “Buyer Intent Network” captures time-based buyer behavioral data from thousands of sources (search engines, industry trade publications, blogs, forums, etc.). That means 6sense is the only predictive marketing and sales solution that sees the entire buyer journey.
What if marketing and sales leaders could detect when a specific buyer is truly in-market, ensuring hyper-focused engagement of the right accounts by a sales team and better customer experience for the prospect? 6sense users see 9X higher marketing-to-sales qualified lead conversions, with 2/3rd fewer sales touches to convert leads to opportunities. Think of the magnitude of that performance gain and what it represents in cost savings and sales productivity at enterprise scale. That’s why companies like Cisco, Dell, VMware, NetSuite, Lenovo and many others use 6sense.
From a technology back-end perspective, 6sense shares the deep data science and machine learning DNA of several other amazing SaaS companies in the Bain Capital Ventures family, including BloomReach, Gainsight, Clari and Captora. Within their respective categories, each of these products automates (a) the extraction of insight and (b) the injection of actionable to-dos into existing workflows (e.g., CRM systems). That combination is incredibly impactful for enterprise customers, as borne out by the growth rates of each of these companies.
Of course, great companies and technologies are forged by great people. Amanda (CEO) has an incredible personal story and is a true domain expert, having spent over a decade running a services business around cross-channel big data marketing tech infrastructure. Viral (CTO) was the architect behind the original Hadoop infrastructure at Hulu. Mark (CSO) was a co-founder at Bizo, which was recently acquired by LinkedIn. This is a seasoned, talented team and we feel fortunate to support them in their mission to transform B2B marketing and sales.
You can read the companies own post on the funding here: http://ow.ly/JkOUx
The race for growth: Why SaaS marketers are feeling the pressure
My thoughts on VentureBeat around the “Revenue Pit-Crew”, a growth technology stack for marketers and sales leaders.
Big Data meets Marketing Again – this time in the world of “offline” CPG
This is a guest post by my colleague Ajay on why we invested in InfoScout. See how this startup is fundamentally disrupting the market research industry via mobile.
Ajay Agarwal: Startups, SaaS, and Steelers
Today InfoScout announced the launch of their company and their analytics dashboard for Consumer Packaged Goods (CPG) marketers. Bain Capital Ventures, along with Founder Collective and Dunnhumby Ventures, led a $5M Series A funding round in the company. We are thrilled to be partnering with the InfoScout founders, Jared and Jon, along with the entire InfoScout team.
We’ve discussed in the past here and here the rise of Marketing as the next great function in enterprise technology. A new wave of startups is leveraging Big Data and cloud computing to deliver incredible power to CMOs, giving them access to real-time insights and helping them drive faster, more data-driven decisions. InfoScout is leading this trend in the CPG industry where the marketing challenge is even more acute since the CPG brands don’t’ have direct access to the customer data (this is owned by the retailers) and the customer purchases take…
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“To run my business is to run it on Wrike”
Why we are in investing in Wrike
Today, Wrike announced a $10MM Series A funding round led by Bain Capital Ventures. We are thrilled to be partnering with Andrew Filev and Team Wrike! Here are just a few qof the reasons why we are excited to be on board.
Because Wrike is a great product
We could tell you that Wrike is a unique product because it adapts to your existing workflows, vs. requiring you to change how you get things done. Or that it sits across task management AND collaboration, vs. just doing one. Or my personal favorite – it works in your email.
But task management software is like ice-cream – everyone has their favorite flavor. So let’s just look at Wrike by the (engagement) numbers:
Being boot-strapped, Andrew and his team had to build a product that users love (and pay for). These usage metrics speak to something special. In the words of one customer:
“Wrike is the backbone of our company. It is so integrated within our company that it would be painful – and painful is not a strong enough word – to replace it.”
Because the “work cloud” needs more connective tissue
Between Google Drive, Dropbox, Box, email, etc., businesses have an incredible amount of data and documents in the cloud. Managing workflows across those platforms is increasingly challenging. Doing so within the app that most knowledge workers live in – email – is even harder.
And the next generation of knowledge workers will be even more cloud centric.
We think Wrike, with its flexible workflows and Drive / Dropbox / Email integrations, can be the connective tissue across those cloud apps.
Because “land-and-expand” is already working
As noted earlier, Wrike customers more than double their number of seats within the 1st year of using the product. That only happens if you have a great product and happy customers.
BCV has a long history of backing companies with “land-and-expand” DNA, including SolarWinds (NYSE: SWI), LinkedIn (NYSE: LNKD), SurveyMonkey, Rapid7, Optimizely and many more. When we see those fingerprints in a company, we know it can be special.
Because it all starts with the people
Andrew and his team have delivered a category-leading product, happy customers and huge growth with no outside capital. And they have built a great company culture with a real sense of mission around empowering their users.
Those are incredible achievements, but we get the feeling that Wrike is just getting started. We are excited to see what this crew does with a full tank of gas!
SaaS Valuations Update
This is an update on the data in my previous post on Software-as-a-Service (SaaS)Valuations. For full context, read the original post here:
Keeping it SaaS-y: Valuations for SaaS Companies
Many of you have reached out to me asking for the source data in this post. Since it’s based on an internal analysis we did at Bain Capital Ventures, I thought I’d share the updated version of the data.
SaaS Valuations Grouped by Growth Rate & Margin (March 2013)
In short, looking across all public SaaS Co’s, high growth (>30% YoY), high gross margin (>70%) companies trade at 7.6X Enterprise Value / Next Twelve Months (EV/NTM) Sales, vs. industry wide average of 5.5X.
And growth rate matters more than gross margin. The top-left quadrant (low growth, high gross margin) trades at 3.7X. The bottom right quadrant (high growth, low gross margin) trades at 6.2X, if you strip out Workday.
What’s Next After SaaS? Big Data Applications
This is a guest post by Ajay Agarwal, my colleague at Bain Capital Ventures, who was the Series A investor in BloomReach. That company has the kind of story that gets all of us excited to build great tech. Congrats to the team!
Today one of our portfolio companies, Bloomreach, announced a new funding round led by NEA and their partners Scott Sandell and Ravi Viswanathan. Bain Capital Ventures and Lightspeed Venture Partners also participated in the round. We are thrilled to work with NEA and welcome them to Bloomreach. I have known NEA for 17 years…their managing partner, Peter Barris, was on the board of Trilogy. Peter, Scott, Ravi and the entire partnership at NEA are world-class.
I had the good fortune of meeting Raj De Datta and Ashutosh Garg, the co-founders of Bloomreach, four years ago. At the time, it was the two of them and an idea. The founders wanted to solve the “content discovery” problem online and make sure that every web business in the world could be effectively “found” by their respective customers. Together, we at Bain Capital Ventures and the founders spoke to over 25 CMOs to validate this opportunity – the feedback was extremely strong and helped shape the initial product vision. We subsequently led the Series A funding in March of 2009, alongside a great group of strategic angel investors.
Less than four years later, Bloomreach employs 100 people and is on path to being the fastest growing SaaS company in history. They are one of the pioneers in the emerging Big Data Applications space: using data from inside and outside the enterprise to transform enterprise functions. Bloomreach uses techniques such as machine learning, web crawling, and search technology to mine a massive amount of data. That data drives marketing insights, new customer traffic and most importantly, new revenue. On average, BloomReach customers see 94% lift in non-branded, natural search traffic.
Unlike the last generation of SaaS and cloud marketing applications, Bloomreach is not a “form on top of a database” or a repository of manually entered data and workflow. These types of sales and marketing automation solutions are necessary and important, but fail to deliver real measurable business value and ROI to the enterprise. In contrast, Bloomreach and companies like it are helping web businesses large and small enjoy high margin revenue through an automated service and by doing so, are transforming the marketing function….which we believe is the next 10 Billion dollar opportunity in enterprise technology
Raj and Ashutosh have been outstanding founders and exemplary leaders. They have created a company and culture that is built to last. The last four years have been a fantastic journey. The opportunity for Bloomreach is awesome and we look forward to deploying the new funding in relentless pursuit of our vision.