Why We Invested: Highspot
Author: Karly Wentz, Rashmi Gopinath, Sami Ahmad, Priya Banerjee, Raj Sharma & Alex Tung
At B Capital, we have closely tracked the rise of RevTech as one of the core areas of our broader Future of Work thesis. As enterprises look to accelerate top-line growth, it makes sense that the sales organization is prioritized and is where substantial investments are made. At the same time, companies continue to face a constant battle with hitting attainment metrics and sales rep churn. This has driven the rise of sales enablement.
Sales enablement teams support the sales organization by providing the information, content, and tools for reps to perform most effectively. Through improving seller efficiency and performance, enterprises see significant benefits, including top-line growth.
Sales enablement has emerged as a rapidly growing space that sits within the broader revtech stack. As revenue leaders see optimizing the sales function as a key to higher rep performance and lower churn, there has been increased focus on enabling the sales team to do their jobs more effectively. This is both as a distinct job function as well as the software solutions that support them. The sales enablement role is quickly increasing in penetration across organizations, rising 19 percentage points in just two years – from 55% in 2019 to 74% in 2021 – according to Sales Enablement Pro’s ‘State of Sales Enablement’ report. Similarly, the market for sales enablement software tools is massive and growing quickly, estimated at ~$20bn today.
Sales enablement software is currently considered essential infrastructure for the sales org. These tools seek to support revenue teams and optimize the sales function through:
1) content management, giving reps easy access to the most relevant and up-to-date marketing materials,
2) learning management, including training and coaching to support ongoing rep performance, and
3) analytics, to help optimize the overall function.
These tools work together to increase seller efficiency, supporting conversions and reducing churn.
This is why we are thrilled to announce our investment in Highspot, a sales enablement platform designed to optimize sales teams and improve rep performance. Highspot has long been recognized as a leader in content management by sales teams for its superior UI, leveraging its unique design to increase usage and usability, supplemented by the use of AI and analytics to optimize operations. Highspot ensures on-brand, compliant and up-to-date marketing content – as well as data on that content’s impact – are integrated into the rep’s workflow, and integrates with the rest of the revtech stack (i.e., CRM, sales engagement, conversation intelligence, etc) to operate as a unified platform. In addition, Highspot’s dynamic analytics layer allows its customers to collect a compelling data set that outlines a 360-degree view of a rep, informing future strategies.
We’re also excited about Highspot’s opportunity in the broader sales enablement space with the launch of its product offerings. With the release of Train and Coach in early 2021, Highspot has become one of the most cohesive end-to-end platforms on the market, with all components of sales enablement software integrated on a seamless, unified platform. This is bolstered with a layer of analytics to optimize the overall sales function, using data-driven insights from content and rep behavior to inform future best practices. We believe Highspot’s product roadmap and focus on AI and analytics are key differentiators, allowing the company to more effectively serve revenue teams.
We have been tracking Highspot for a few years, watching it become the best-in-class solution it is today. The company has received several accolades, including rankings on the Forbes Cloud 100 list in both 2020 and 2021; and recognition as one of 2021’s Best Workplaces by Fortune Magazine. Highspot is also a top ranked product for Sales Enablement on G2. It is clear customers love Highspot, which is supported by the company’s best-in-class retention metrics – annual recurring revenue retention was over 130% for the last twelve months. This has allowed the company to scale rapidly. Highspot has achieved 935% revenue growth over the last three years and currently has over 700 customers across multiple industries. Notable Fortune 500 customers include Aetna, Cardinal Health, Staples and Siemens, among others.
Highspot is well positioned for its next phase of growth with several key channels for future expansion. Highspot has and will continue to see strong organic growth in its core business of content management. The company also has a robust roadmap expanding into additional tools and functionality as it continues in its mission to support sales organizations. We expect to see this growth amplified as Highspot continues to expand and cross-sell into its new training and coaching products. Highspot has successfully acquired its customers across a variety of industry verticals, including technology, financial services, healthcare, manufacturing, education, CPG, media, and life sciences. The company also has a growing international presence in the UK, France, and Germany, and we see further geographic expansion as a key lever for future growth.
After meeting Robert Wahbe (CEO), Oliver Sharp (Chief Solution Architect), Steve Lucco (Chief Scientist), David Wortendyke (CPO) and the rest of the Highspot management team, we were truly impressed with the talent and cohesion behind the company’s phenomenal performance. This team has worked together for over 30 years, going back to grad school at UC Berkeley in the early 90s. Robert, Oliver, and Steve co-founded Colusa Software together, which was acquired by Microsoft in 1996. Prior to founding Highspot, the four combined had an aggregate 75 years of experience working at Microsoft. Given this experience, the team has substantial leadership and technical expertise, and is well-positioned to continuing executing on Highspot’s future growth plans.
At B Capital, we strive to partner with experienced founders who drive real value for their customers through innovative technology. We believe Highspot fits that profile perfectly. Sales enablement software has become critical infrastructure for enterprises. B Capital’s close partnership with BCG will allow us to bring the benefits of Highspot to BCG’s global 2000 client base. We look forward to working together with Highspot in this next phase of growth and support them on their mission to further empower and enable sales organizations.