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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 Crowd’s 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 Abel’s 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 doesn’t 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 aren’t 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 that’s 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 Magazine‘s annual list of the 500 fastest-growing private companies in the U.S. In 2017, G2 Crowd’s 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 it’s raised altogether, $100 million. VentureBeat regrets the error.
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