Deals

Infusionsoft gets $54M to help small businesses compete with heavyweights

Mark Twain said “It’s not the size of the dog in the fight, it’s the size of the fight in the dog.” The same principle applies to small businesses owners. But regardless of spirit and dedication, they won’t get through too many rounds without a strong online presence.

Infusionsoft has raised $54 million from Goldman Sachs to help small businesses succeed. It does this by building custom, all-in-one systems that combine CRM, email, and social marketing, and sales tools. From this platform, small business owners can more effectively attract new customers, wage automated marketing campaigns, engage existing customers, and drive sales.

Infusionsoft started out as a custom software shop in 2001. The founders quickly realized that companies sought this type of comprehensive product. Its target customers are businesses with two to 25 employees that are “owner-operated, lack IT support, follow their buyers online and desperately need effective sales and marketing tools to succeed.” While Marketo, Hubspot, and Salesforce offer comparable solutions, they do not cater specifically to this segment.

“The small business market is underserved by software companies,” said CEO Clate Mask in an email interview. “Most vendors in the sales and marketing SaaS industry are gunning for the enterprise clients and their products show it. Mid-market software and IT support is too expensive and complicated, but simple marketing and sales tools can’t effectively manage their growing businesses. True small businesses are left having to figure out how to make these systems work for their needs and it usually fails.”

Customers include wedding videographers, kickboxing gyms, and animal clinics as well as internet startups. Infusionsoft has over 12,000 customers around the world and grew by more than 50 percent last year. This third round investment will contribute to developing the product and accelerating its own marketing and sales efforts.

“The news of this deal might shock some people due to the size of the round and the fact that it’s coming from a company outside of Silicon Valley,” said Mask. “But anyone who’s been following Infusionsoft knows that this makes perfect sense. We’ve had a vision for a long time and we stuck to it like glue. Every decision made — from hiring to product development — reflects that vision and now we’re ready to go big.  The sales and marketing SaaS market is blowing up, the small businesses market is blowing up, and we have the most perfect launch pad.”

This brings Infusionsoft’s total raised capital to $71 million. Previous investors include Mohr Davidow Ventures and vSpring Capital. The headquarters are in Chandler, Ari. (or Silicon Desert). It currently has 350 employees.