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Chicago’s G2 Crowd, a Yelp for business software, raises $55 million (updated)


G2 Crowd , a peer-to-peer review site for business apps and software, today announced that it has raised a $55 million round of financing led by IVP Capital. Existing investors Accel and Pritzker Group Venture Capital, also joined the round, as well as new investor Emergence Capital. This brings the total amount of money raised by the Chicago-based company to $100 million. Launched in 2012, G2 Crowd is led by current CEO and cofounder Godard Abel, a two-time enterprise software entrepreneur. His first company, a cloud-based price-quoting provider called Big Machines, was acquired by Oracle in 2013 for about $400 million. His second, a price-quoting software provider for sales reps called SteelBrick, was acquired by Salesforce for $360 million in 2015.   He stepped down temporarily from his role as G2 Crowds CEO to help integrate SteelBrick into Salesforce and then resumed the position in June. Though Abel describes G2 Crowd as a Yelp for enterprise software, he says it is seeking to disrupt traditional analyst companies, namely Gartner. G2 Crowd was born out of Abels frustration at his previous two companies over how long it would take analysts to update their briefings. Frankly, I think the legacy model of one analyst trying to cover a space doesnt work anymore, Abel told VentureBeat in a phone interview, citing the fact that younger office workers are already more inclined to turn to search engines than analyst briefings to get up to speed on new products. Additionally, with startups now creating enterprise or cloud services for specific departments within a company, businesses have more new software than ever before to sort through. Gartner evidently sees the value proposition of peer-to-peer review sites, having acquired G2 Crowd competitor Capterra in 2015. The problem with creating review site business software is that without proper guardrails companies are going to write glowing reviews of their own products or trash their competitors. So users have to be verified by G2 Crowd with their LinkedIn account in order to write a review. (LinkedIn invested in G2 Crowd last year.) To ensure people arent using fake LinkedIn accounts, G2 Crowd also checks for things like the date the account was created and how many connections it has at the company where the person profiled claims to be working. Syncing up with LinkedIn also allows people to see if a review is coming from someone who works at a company thats the same size or within the same industry as them. Verified users have so far written more than 500,000 reviews for 56,000 products on G2 Crowd, ranging from Slack to QuickBook to MailChimp. Users can also add screenshots or videos walking through how they use the product. Writing or viewing reviews is free, but G2 Crowd makes money by offering marketing add-ons to vendors. The company said 1,200 of the 56,000 products reviewed on G2 Crowd have a paid premium profile, meaning the company can add its own videos and content to the profile page, as well as getting additional metrics on the types of people viewing the profile. G2 Crowd was ranked 179th on Inc Magazines annual list of the 500 fastest-growing private companies in the U.S. In 2017, G2 Crowds revenue was $11.1 million, up 2,414 percent since 2014. Abel said G2 Crowd plans to use its new financing to expand to Europe and Asia, starting with Japan. The company currently has 210 employees between its Chicago and San Francisco offices, with the majority located in Chicago. Correction, 4: 55 a.m.: Updated with the correct amount of money that G2 Crowd raised in its latest round of funding, $55 million, and the amount of money its raised altogether, $100 million. VentureBeat regrets the error.

G2 Crowd, a business software marketplace, raises another $55M at just under a $500M valuation


G2 Crowd, a platform that lets businesses search for, compare reviews and pricing for, and then buy software and other IT services — it likes to refer to itself as the Amazon of business software — has raised $55 million in growth funding to continue expanding its business. This round was led by IVP, with participation from enterprise VC Emergence Capital and Accel (Accel led its previous round, which also included LinkedIn as an investor), and brings the company close to half a billion-dollar valuation, according to a source close to the company. This is a big leap: In May 2017, when it last raised money, G2 Crowd was valued at $130 million post-money, according to PitchBook. The rise of that valuation underscores just how fragmented and competitive the market is for business software today, and how a company that provides a useful way to navigate through that has a very good shot at building a lucrative business. More generally, a vertical search engine filling a gap in the market and that actually works remains a killer app, despite the dominance of Google in so many areas of search, and of Amazon in so many areas of online commerce. The other big leap that G2 Crowd has seen has been in its growth in the last 16 months. Software reviews are a core part of what it offers to people who come to the site — the company likes to compare itself to Amazon, but Ive previously described it as the Glassdoor of software reviews — and today it has 500,000 verified-user reviews free to browse on its site. Thats more than double the 225,000 reviews it had in May 2017. It has traffic of 2 million business professionals monthly, who go to G2 Crowd to browse 58,500 products across 1,200 categories. G2 Crowd also happens to have a very strong SEO game at the moment, with a top slot when you input searches like Workday competitor. While SEO and software comparisons are what might bring in users, what makes money for G2 is that many of them stay to shop for software, and that is what the company will continue building out with this funding. We started as a way to help companies make better buying decisions. Now, the focus is on helping them reach their potential through digital transformation, more quickly than ever, said Godard Abel, CEO and co-founder of G2 Crowd. It plans to use the funding to ramp up hiring, expand internationally in Europe and Asia and make some acquisitions. We have our eyes on a few companies that are complementary to our vision and mission, CMO Ryan Bonnici tells me. When it comes to marketplaces, in todays business climate its winner takes all. What Amazon is for consumers, G2 Crowd is becoming for businesses: the place to discover and buy the best business solutions, said IVP General Partner Jules Maltz, in a statement. G2 Crowd is disrupting the $3.7 trillion enterprise technology market for buying and selling business solutions, one of the fastest-growing sectors of the global economy. Small businesses to large enterprises like Nike and Facebook trust G2 Crowd to discover and buy the best solutions for their business. Maltz is also joining the board with this round. There are, of course, others that offer similar services to G2, with companies like IDC, Forrester and Gartner being strong contenders for enterprises who are evaluating IT purchasing decisions, and others like Owler also hanging in the wings. Investors believe G2 Crowd is king at the moment, though. G2 Crowd has the highest traffic and engagement, largest selection of products and services, and highest quality data of any B2B marketplace, Jason Green at Emergence, said in a statement. G2 Crowd is already growing at an incredible rate, and this latest funding round will only help them build the next Amazon for business even faster.