SaaS Interviews with CEOs, Startups, Founders
Will Gong Break $10b Valuation by October?
05 Jul 2021
Chapter 1: What is the main topic discussed in this episode?
So the most recent round is the Series D, $200 million, led by CodeTwo, Thrive, Salesforce, and Index. This is the fourth round, so total to date, I think it was like 300, almost $340 million. You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hello, everyone. My guest today is Amit Bendop.
He's the co-founder and CEO of Gong.io, the number one revenue intelligence platform for sales. He brings more than 20 years of leadership experience in hyper-growth enterprise software startups, managing product marketing and sales for global corporations. Prior to founding Gong.io, he was the CEO of Sisense and CMO of Panaya. Amit, you ready to take us to the top? Yeah, let's give it a shot.
So you're very specific there in calling Gong a revenue intelligence platform for sales. Help me understand what that means. Yeah, so revenue intelligence is kind of a new thing. The majority of the world still doesn't know what it is, but over like a thousand companies already do. It's a new paradigm for managing customer facing organizations rather than relying on information that
Salespeople and customer support people manually type into their CRM system or support systems, gone automatically captures information from the customer's mouth by reading their emails, by joining calls, by joining meetings.
using natural language to understand and to compile that information, creating insights both for the customer base and people, how they can get better, and for the leadership team so they can understand exactly what's going on without having to chase people to update the forms.
And this is obviously something that people are using, not only just like they were pre-COVID, but reading some of the press that you put out during COVID, it sounds like you significantly increased revenue during COVID. I want to dive into that. But on the back end of that, you just did another funding round, I believe.
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Chapter 2: What is Gong.io and what does it offer?
So help us understand, what's the structure like today? How have you funded the company? So the most recent round is the SiriusD, $200 million. led by CodeTwo, Thrive, Salesforce, and Index. This is the fourth round, so the total to date is almost $340 million. The last round was led by Sequoia in December, $65 million. The valuation on this most recent round was what?
It was close to $2.2 billion. And what was it back in December? It was close to 750, so 3x. So I asked that very specifically, right? Because now I want to dive into that. How on earth do you essentially add $1.5 billion in enterprise value over a six-month period when the world is also shutting down? Uh, there, there's a number of reasons for that. So we always grew like very fast.
We almost like, we always like tripled the valuation about the same time. Like the last round was a significant like multiplier. So this isn't, we're not growing just because of like COVID. We did pretty well before that. I think we've done well regardless. Uh, but there are a few reasons. First, it does give us like some tailwinds. Um, and, um,
Second, the potential for gone is so infinite that, and now more and more people in the investment community are starting to recognize this. So you're looking at something like massive market potential. Very nice execution and traction. Seems to be faring well with the new normal, right? So, and there aren't a lot of investment opportunities, a lot of liquidity. And so there you have it.
So, so walk me through, you know, how you're getting customers. You launched a company, I believe back in 2015, 2016, correct? Yes. And when you asked him on the show in February of 2018, you shared you, you were serving out 200 customers. How many customers are you serving today? And then break down how you're acquiring them. Now we're, We're approaching like 1500, maybe a little less.
And we're trying, it's mostly direct. So we haven't even started developing my channels and partners. It's either like outbound calls. We've got a good amount of inbounds, a lot of like referrals and word of mouth. So people got sales as like, I think about like 20, 15 to 20% annual attrition.
But actually, that's worked well for us because if I use DONG at my current company and I'm leaving another, odds are we'll get a new lead. So that kind of organic word of mouth has been pretty good for us. I don't obviously pay for the product. I'm not a big enterprise. But when I do get a sneak peek at the product UI, I see GIFs where there's two call recordings
performing rep that kills quota and one that misses and you'll see like the one that hits quota you know you'll say hey they use words like um you're and you will and and and the one that doesn't hit never uses the word you or your or you know if you pay us you will get x um this is the obviously unique insight now do other sort of platforms in your space do that or is that unique to gone
I mean, we're not the first to do that. So first, there are like in contact centers, there are like technology do something like similar. It's like, it's pretty far, but I mean, just the idea of like, identify which word we were saying that we did not invent that.
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Chapter 3: How has Gong.io's revenue changed during COVID-19?
Well, I didn't tell you that. You kind of packed away the number. Oh, did I not? It was, I remember that interview, but it was less than that right now. It's north of 30. I mean, if you, yeah, so, just looking at the average, Gong is like, entire stack of customers.
We have like on the lower end, it could be usually the minimum would be like 15K for smaller customers and seven figures on the upper tiers and like all the range in between. And again, this is like happening pretty fast. Like we always thought that one day like, you know, like we'll get to like very large customers, but actually started like reaching out to us a lot sooner.
Chapter 4: What does the latest funding round for Gong.io look like?
For a company our age, we're pretty diverse in terms of size of customers. Just to repeat that back to you, people can get started for as little as $15,000 a year just to start using Gong. They then can expand over time and you have customers paying north of a million dollars a year to use Gong? Yes. Any eyes on your first $10 million-a-year account? How do you get there?
You have to upsaw this like crazy, get thousands and thousands of seats on them. I don't know. I mean, it's not that it's kind of like a trophy that we need to accomplish. I'm sure it will. And we're kind of like long-term minded. It's not about things. We grew because of the rate of reviews that we get from customers. That's what we want to get. And I'm sure things will- The rate of what?
The rate, we call it like raving fans. It's our number one- operating principle. We don't want to have just happy customers. We want this kind of like NPS, like in the 70s. That's actually driving the growth. Usually, we'll get into accounts and others will start wanting on what these guys have and say, oh, this is pretty cool. I want it too. It actually spreads virally within the account.
We're not necessarily trying to land a much bigger deal on day one. Yep. Now, I mean, if I take the 1500, obviously customers times even $30,000 ACV, it sounds like obviously you have a range and maybe it's higher than that on average today, but averages aside, I mean, that puts you north of a $45 million run rate today. Is that accurate? Yeah, well north of that.
Do you have eyes on, again, I'm just comparing this to other Series D founders I've had on, right? I mean, I assume you're getting close if you haven't already passed $100 million run rate. Do you think you'd do that this year if you haven't passed it already? No, no, no. We're not going to get to $100 million a year. We're not far from that. Okay. Interesting.
In terms of strategy to get there, whether it's, again, it sounds like it'll be more than this year, maybe next year, do you think it will more be a function of your upsell and expansion team driving more adoption and then increasing accounts, respectively, or will it be new customer additions completely? We have both. We always scale. We have two things. First, very strong new logo acquisition.
And second, great expansion within customers. And we always have to calibrate. Sometimes there are a lot of expansions. So the new team, people don't necessarily need to sell many new logos. So we started breaking the accounts and make sure we pull both levers. But both of them are pretty strong. I mean, I'm kind of sure Google are the zone of our NDR.
plus the new logo, that's what drives the strong growth. Well, I mean, if you look at revenue growth over the past 12 months, what percent of the growth would you say came from expansion versus new ads altogether? Do you know? I don't even like the top of my hands. Okay. Both are substantial. Fair enough.
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Chapter 5: How has Gong.io achieved a significant increase in valuation?
What about altogether? Ignore cohorts of where the growth came from, just total revenue growth past 12 months. What was that? Um, We have customers, so our history, we started selling in 2016, so we have about three years of history. Those cohorts are around 250 and north percent of what they bought, and most of them are still with us.
very, very strong growth over time and retention, lifetime value, all those metrics. That's one of the things about the valuation that our unit economics are very strong and the product power is driving that. Are there any really strong unit economics that you guys are very proud of and you worked really hard to hit that I haven't already asked about? I mean, you name it.
So MDRs are, you know, LTV to CAC is like greater than five. I mean, you know, it's a virtual internet with like very little sharing that they have. Tell me more. I mean, tell me more. Let's touch on, before we wrap up, let's just touch on CAC real quick. So let's just use a new $30,000 ACV account. What are you comfortable spending to get that account in terms of CAC?
I could easily spend $30,000 because with very little churn, I could get $150,000 a week and maybe even more. We're not spending $30,000, but we could, and it would still be pretty good business. Where are you spending money when you are getting new customers? Obviously, it sounds like you have an inside sales team. Are you doing any paid? Obviously, we're spending on clients.
right so product drives product uh gives you like pricing power it gives stickiness uh and it gets people to talk about you so that's like always like our thinking second we do some paid ads um most of our I think our inbound, it's hard to measure exactly, right? Because things are intertwined. But content marketing has been very strong for us, especially on social media.
So we create content that is very different and people absolutely love. We have three attributes for content. First, it's easy to consume. So not like 13 pages of white papers that nobody budget to read. Second, it's immediately applicable. It's not some kind of like, you know, bold ideas that you could apply in 20 years. Something I could use right now. You said about those words or things.
And three, it is relevant to our audience, but only to our audience. Like, you know, it doesn't interest doctors or dentists or beauticians, right? It's only interest people. So it's kind of like self-qualifying and that's creating a lot of following. It drives, not necessarily someone reads the blog post. I mean, I got it by dawn, right? But it does, over time, it does create recognition.
People say, oh, this is interesting. Who's that company? Where are they getting this data? Why is everybody talking about it? That drives a lot of impact. Do you know how many new trials you're getting every month because of these strategies? We, we get a ton and again, we don't know exactly, uh, we kind of gave up and try to know exactly where they come from.
It's not like a specific and or anything. Those, I mean, we do some of those, but it's like, you know, I spoke with a buddy and then he mentioned Don, you know, you know, one of my coworkers mentioned Don and I read a blog post and I saw him. I downloaded an asset. The strategy makes total sense to me. Yeah, that strategy makes sense.
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Chapter 6: What customer acquisition strategies does Gong.io use?
They kind of do have like NPS and renewal rate, which is kind of proxy, but it's a very small portion of their compensation. So they don't try to pressure the customer anything, just to keep things top of mind. All right, let's wrap up here. Famous five, number one, favorite business book. How to be a capitalist.
You're supposed to make me feel good at the beginning of the interview, so then I go easier on my questions. I read a lot. I read a lot. Right now, I'm reading none. What's it called? Origin Story. Right now, it's more of a history book. It explains a lot of things by David Pierce Chandler. It's a pretty good book.
Not strictly a business book, but it does give a lot of interesting angles about the world and where it's coming from. A lot of patterns applicable to business in that book. Number two, is there a CEO you're following or studying? I wouldn't say falling, but I'm a big fan of Steve Jobs. I only wish it was a nicer people version of him, but product and marketing, that would be my choice.
Number three, besides Gong, what's your favorite online tool for building your company? Easily LinkedIn. LinkedIn is massive for me and for our company. Number four, how many hours of sleep do you get every night? Like five. I'd say no more than five. No more. That's not a lot. It's not. It's just my clock. I don't even sit on a log clock. That's where I wake up on my own on a weekend, right?
So I don't need a lot of sleep. That's great. And what's your situation? I mean, married, single kids? Married, two boys, 16 and 20. Same woman for like 26 years. Wow. And how old are you? I'm 56. How old? 36? 56? 36? I thought I was going to say holy mackerel. Okay, you said 56? 56, yeah. 56, okay. Last question. What's something you wish you knew when you were 20? Um...
being a rock band i never wanted to be like intact that was that was the plan didn't quite work out uh as well but i'm pretty happy where i am what instrument would you have played if you joined a rock band ah guitar for sure i think they still play like uh when i get a little bit of time but uh yeah I love that, guys. Amit, there you have it, gong.io.
They've been in the news recently, did a $200 million raise at a $2.2 billion valuation. That was from a $750 million valuation just about eight months prior when they did their $65 million raise back in December of 2019. They're serving over 1,500 enterprise customers. Over 60,000 sales reps use the platform actively.
Again, a new way to really measure and gain revenue intelligence from your sales functions as they look to continue to scale. They won't hit $100 million in run rate this year, but obviously is on their radar as they continue to scale, focused on expansion revenue, where net revenue retention today is over 150%. Amit, thanks for taking us to the top. Thanks very much, Nathan. My pleasure.
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