Mobile CRM startup Clari raises $20m to step up machine learning work

Summary:Series B funding will help mobile sales productivity company Clari develop its software and marketing operations.

Mobile CRM firm Clari says the $20m investment announced today will fund continued development of the machine-learning software behind its sales productivity product and help expand its own sales operation.

The series B investment, led by Bain Capital Ventures, also involved Northgate Capital and adds to the $6m put up by Sequoia Capital in December 2012.

Clari consists of a cloud service and a free downloadable app that logs into the sources sales reps typically use every day on their mobile devices, using machine learning to flag up the most important information and automating certain data entry tasks.

"Reps not only are dissatisfied with their CRM, they're really tired of the manual data entry that's forced on them. They'd rather be in front of customers," Clari CEO Andy Byrne said.

"The side effect of that is there's really poor data quality in these CRM systems — whether it's Salesforce, SAP or Microsoft Dynamics CRM — because the reps don't have the time to put the information in."

Earlier this month, Nutanix said it is using Clari, which was set up in July 2012, for its salesforce. The converged compute-storage company reported in a Clari document that time spent on data entry was reduced by between 30 and 50 percent and selling time increased between 15 and 25 percent.

Reduction in data entry tasks is one aspect of Clari, Byrne said. The other is the quality of the data the software draws out, which improves sales efficiency.

"There are two parts of it. One is for the rep, one is for the manager. For the rep we have the Clari knowledge graph and that graph is processing through 12 billion objects," Byrne said.

"It is learning about the rep, the rep's deals, current customers that they're managing, new relationships that they're trying to nourish, and surfacing up valuable, relevant content through that graph that then allows them to be more effective."

The second aspect of the software used by Clari is a library of machine-learning algorithms that looks at historical data from CRM, calendar, email and rep activity across numerous completed deals, and uses that to predict the outcome of current prospects.

"It is effectively a pattern-matching algorithm that allows both the rep and the manager to know what they should be doing next on their deals to be able increase the probability of closing those deals based on historical information that we're analysing," Byrne said.

"It allows the manager to know where they should spend their time, as opposed to using the manger's instinct on what they should be focusing on."

Clari is adopting a similar business model to that used by Box, with a free app for the end user, who can try it and see the value in it, followed by corporate licensing.

"We've got virality built into the product. Once that rep downloads the app, it spreads within their team and it finds its way to the manager and we have a workgroup," Byrne said.

"We give them the ability to use that new deal progression view so the manager can trial and see a new visibility into how deals are progressing in the field. Then we seek to monetise at that level on a per user per month basis."

The cost per rep is between $50 and $60 a month. Typically, workgroups are built in one to two weeks by which point the manager should have seen the added value and increased productivity.

"In some cases what happens is the managers introduce us to sales ops. Sales ops, of course, owns the budget and owns their CRM installations. There are some cases where we will actually do a site licence beyond just that workgroup and we will monetise that entire salesforce."

Along with Nutanix, Clari customers include Cisco, Box, Nimble Storage, and Juniper Networks.

"If you look at what's happened in the consumer world and the way people adopt technology, the consumerisation of IT is obviously a big trend that we've seen for a while. We're starting to see this propagate in the sales domain in particular," Byrne said.

"There's a new generation of companies that are going after this emerging market category of sales productivity management that's adjacent to that CRM market.

"Customers are spending a lot of money on mobile. They're spending a lot of money on business intelligence to be able to increase the top-line revenue and increase the productivity of their sales teams. This is a massive trend where we haven't seen the application of data science to sales."

More on customer relationship management

Topics: Enterprise Software, Business Intelligence, Cloud, CXO, Mobility

About

Toby Wolpe is a senior reporter at ZDNet in London. He started in technology journalism when the Apple II was state of the art.

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