A team photo of crowdsourced B2B sales data startup Lusha
For many sales and marketing teams, finding leads is a time-consuming and tedious process. Lusha, a sales intelligence platform for B2B sales, is helping with a crowdsourced database that helps companies narrow down their lists of potential customers to the most likely candidates. Founded in 2016, the company was bootstrapped until it raised its Series A just nine months ago. Today, it announced it has hit unicorn status, with a $205 million Series B that puts the Tel Aviv-based startup’s valuation at $1.5 billion.
The round was led by growth equity firm PSG, with participation from ION Crossover Partners and brings Lusha’s total raised to $245 million, including its $40 million Series A announced in February. Co-founder and chief executive officer Yoni Tserruya said that since raising its first round of outside funding, Lusha’s growth rate has tripled and it wants to put more resources into its go-to-market strategy. The Series B will be used on Lusha’s data infrastructure, new features, privacy compliance and expanding its market share in the United States.
Lusha says its user community, which contributes data like company information and business contact details, now includes more than 800,000 sales professionals and 273,000 sales organizations, including large tech firms like Facebook, Google, Dropbox and Uber. Most of Lusha’s clients are B2B SaaS companies, but it’s also used by venture capital firms, investors and recruiting agencies.
The company’s tools include a browser extension that displays information about a company’s industry, size, revenue and sales contacts. A “prospecting tool” lets users filter leads into specific customer segments. Lusha also offers API and integrations so its database can be integrated into a company’s existing sales and marketing software systems. The company is GDPR-aligned and CCPA-compliant. When people are added to its database, Lusha notifies them so they can edit or remove their contact information.
Lusha was launched five years ago by Assaf Eisenstein and Tserruya because they realized social networks weren’t an effective way to generate quality sales leads.
“When we started in 2016, we realized that you can reach out to anyone because you have social networks like LinkedIn, Facebook and so on. So if you want to reach out to someone, you can do it, but the way it works with social networks is not efficient. There’s a lot of noise,” Tserruya told TechCrunch. “People were starting to ignore a lot of those reach-out requests, but the need for salespeople and marketing teams remained the same.”
Lusha was created to cut through the noise and help sales and marketing teams identify the people who are most likely to want to hear from them.
At the beginning, Lusha was like “Waze for salespeople,” as the company’s website puts it. Once it started crowdsourcing data from salespeople, that generated a network effect. In the early stages, a lot of the data wasn’t particularly accurate. But “as the company evolved, we realized what would make us the best in the industry and the differentiator would be the accuracy of the data and how deep the data is that we provide to customers,” said Tserruya. As a result, Lusha focused on growing its community of users, who contribute and validate data.
Current tailwinds for Lusha’s services include remote work as the pandemic continues. “Sales team can’t reach out to potential buyers face to face like before,” said Tserruya. “Companies that used conferences to generate leads now need to do it remotely, often while working from home.”
Lusha operates on a freemium model. Free users get limited access to data, while those who pay for subscription packages unlock more features. Lusha’s database lets sales teams search for the contact information of decision makers at companies, but Tserruya stresses it only includes business info, not personal data, for its more than 100 million contacts. Then users give feedback about database entries, improving Lusha’s algorithms and datasets.
The company’s database, search feature and recommendation algorithms are meant to be an improvement over the “spray and pray” approach, where sales and marketing teams call or email as many leads as possible.
“The main challenge for salespeople is that they are actually selling a third or two-thirds of their time on admin or aggregating data, trying to understand who this customer is, how to reach out to them, who the right person to contact is and so on,” Tserruya said. “The lack of data and intelligence wastes time for sales team, so more companies are taking a ‘super-targeted’ sales process, where they know exactly who they need to reach out to and why.” For example, users can filter companies by whether they use Salesforce, where they are located and how many people they employ.
He added this is similar to the marketing shift that happened about a decade ago, when companies switched their focus from billboards and TV commercials to targeted ads on Facebook and Google. For example, if a company is selling CRM software, that means they need to specifically target early-stage companies, because once one chooses a system, it will probably stick with it for years.
“So what kind of triggers or signals can help you reach out to sell the CRM? For example, if the company just hired a VP of sales, or their first salespeople. If they just started to sell something, this is probably the right time to reach out to them,” Tserruya said. “The timing and understanding of a company’s lifecycle is really a game-changer for a lot of B2B SaaS companies today and that’s how we try to help.”
Lusha’s competitors include ZoomInfo, one of the biggest data providers to sales and marketing teams. “I think our main differentiation is that they’re very enterprise-oriented,” said Tserruya. “Another differentiation is the quality of our data, because it constantly gets feedback from users, and also our ease of use, because businesses can start using it without talking to one of Lusha’s sales reps, and expand their membership plans as they grow.”
In a statement about the investment, ION Crossover Partners general partner Gili Iohan said, “We have been following Lusha’s progress over the last two years and found the team’s vision and execution highly impressive. As sales teams continue to leverage to drive their go-to-market strategies, Lusha is becoming an integral product for teams to optimize their outreach to improve overall win rates.”
