CaptivateIQ, which develops software to automate the payment of sales commissions, raises $100 million

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The many challenges sales teams normally face have been exacerbated by the headwinds of the pandemic. According to a survey, 48% of sales reps now say they don’t have time to make a single follow-up attempt. Other barriers to closings include establishing urgency, contacting prospects, and resolving price objections. Due to these and other issues, only 24.3% of salespeople actually exceeded their quota last year, reports Sales Insights Lab.

Automation is increasingly being touted as a solution to these problems. As McKinsey analysts write in a recent report: “Sales automation has the potential to reduce the cost of sales by freeing up time spent on administration and reporting, and to generate additional revenue by automating the raising customer awareness in the sales funnel”. According to HubSpot, 61% of companies leveraging automation report exceeding their revenue goals in 2020. And Hinge Research reports that companies that incorporate high-level automation into their sales process generate approximately 16% more leads per year. compared to those that incorporate low-level automation or no automation.

Vendors selling sales automation technology include tech giants like Salesforce as well as startups like RightBound, Alembic, and Groove. Another is CaptivateIQ, which provides sales commission software that eliminates many processes that businesses normally have to do manually. Paving the way for future growth, CaptivateIQ today announced that it has raised $100 million in capital for a post-money valuation of $1.25 billion from investors including ICONIQ, Sequoia, Accel and Sapphire Ventures. , bringing the company’s total capital to $164.6 million.

Automation of commission payment

Management processes around commission programs can be inflexible, costly, and prone to data drift. In fact, a 2017 survey by Xactly found that four out of five companies reported inaccuracies in their sales commission payments.

CaptivateIQ, which launched in 2017 as part of Y Combinator’s Winter 2018 cohort, automates commission workflows. The startup was founded by Conway Teng, Hubert Wong and Mark Schpmeyer, who have a fintech background in investment banking. Teng was a corporate finance analyst at McKinsey and later helped launch loyalty rewards startup Fivestars.

CaptivateIQ’s software gathers data from sources such as invoices and billing systems to perform its calculations. Clients can use it to create, preview, launch, and share commission plans with reps.

“Company clients rely on our modeling approach and our flexible engine that can handle any commission plan, no matter how complex. Rules-based systems, constraining predefined templates, and proprietary formulas are no longer acceptable,” Schpmeyer told VentureBeat via email. “The traditional incentive compensation management space is cumbersome and outdated, and some tools haven’t been updated in a decade. We find that the company is attracted to our modern approach which allows them to build and iterate with confidence in a context of rapid growth.

Last year, CaptivateIQ introduced new data integrations for commission automation as well as sales compensation dashboards with insights metrics. The company also launched customizable templates to export payment data faster and an API to perform financial transactions related to sales.

“Sales compensation is the single biggest go-to-market investment for most B2B businesses, making commission management a critical business process. Corporate organizations have an influx of data from a variety of sources, which can be an unruly and difficult to manage mess, especially when strategies and commission structures can vary. Also, not all solutions have connectors available, and those that do don’t always make data accessible to users,” Schpmeyer said. “Our goal is to eliminate these challenges through our open API, which includes a long list of pre-built integrations that customers use to scale and run their end-to-end financial operations (e.g., Salesforce, Snowflake, NetSuite, Workday). Customers also have the flexibility to build their own integrations that pull data from compatible sources and control sync frequencies that ultimately power reliable real-time commission reporting for each team.

Soon, CaptivateIQ plans to roll out automation tools to help people understand how certain actions will impact future revenue. By being able to model and predict outcomes, the idea is that customers will be able to engage in behavior that benefits their bottom line while helping employees achieve their financial goals.

Sustained growth

Companies like Affirm, Gong, Intercom, TripActions and hundreds of other companies currently use CaptivateIQ’s product. The company – which has strategic investment from Workday Ventures and recently joined Workday’s software partner program – claims to have processed more than $2 billion in commissions for tens of thousands of employees as of 2021. Revenue in 2021 more than tripled from the prior year, even with competition from vendors such as QCommission and the aforementioned Xactly.

“Today, CaptivateIQ powers high-performing revenue teams for several hundred organizations across industries and continents, and has more than a quarter of the Cloud 100 as customers. Some of our most notable clients include Affirm, Amplitude, ClassPass and Podium,” said Schpmeyer. “As for users, which we define as anyone who receives payment from our system, we have tripled the number of recipients on the platform over the past year.”

Some blockers stand in the way of further expansion, such as a lack of awareness of the sales automation market. A May 2021 McKinsey report found that only one in four companies have automated at least one sales process — a slow acceleration the co-authors blamed on sales managers’ lack of awareness of the breadth of automation applications. But Schpmeyer believes this latest round demonstrates investor confidence in the trajectory of more than 200 CaptivateIQ employees.

“Over the past two decades, the industry has suffered from low customer satisfaction scores due to the inability to be flexible when it comes to tailoring bespoke commission plans and being difficult to The surviving legacy actors realized that getting into the business was where the easy money could be made due to the infrequent commission plan changes that were to occur and not requiring investment in a great user experience,” Schopmeyer said. “As a result, there’s a lot of skepticism in the industry when it comes to a capable commission solution, and we think there needs to be more evangelism about how which things are different now with companies like ours that are built by people who have experienced the problem firsthand.

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Aurora J. William