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Founded in 2014, 6Sense has raised $103 million to date growing 100% year over year to a $20m run rate as of December 2019.
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The company pays on average $150k to acquire a $12k/mo customer leading to a payback period of 12-16 months
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Assuming the company sold 10-15% in the Series C round, the valuation was between $275m and $400m for a company with 150 employees and $20m in revenue. Estimated 13-20x ARR multiple
Jason Zintak opened his interview with a stunning data point – makes sense for a guy heading a company built on leveraging data.
As a planet, we send 270 billion e-mails daily, and only about half of the seven billion people on earth use e-mail.
That’s a lot of people trying real hard to get everybody else to buy their product.
The 6Sense product helps companies leverage previously-unknown data to surgically strike at marketing leads. That’s what Zintak came on the show to explain, as well as reveal some key financial information about the state of the company at the end of 2019.
A History of Big Data
6Sense launched in 2014 but Zintak wasn’t a founder at the start.. He was brought on as CEOin 2017, much like he was at analytics company Platfora – and much like he was brought on as Chief Sales Officer at Responsys.
Both of those companies ended up being purchased by other larger companies and Zintak was given generous compensation. But as he describes it, he had “enormous entrepreneur hunger.”
And so with both a successful marketing company and a big data company experience under his belt, it seemed only logical to get involved in 2017 with 6sense, a company that aims to combine the two to achieve never-before-seen levels of business intelligence.
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Strike Force Data Tactics
There are a zillion factors in play when it comes to who’s going to respond to your marketing emails. One of them is just plain time.
6sense’s whole backbone is calculating the exact right time to make a move with a marketing pitch or offer, based on a creative variety of datapoints that get generated and mostly ignored by the majority of companies.
Take forms, for instance. Google knows when you’re typing something into the search bar because it checks its own algorithms for possible autocomplete suggestions.
But how many businesses capture form data as it’s being typed? That’s a big expense, but an extremely valuable thing to find out. That is because it shows you who had you on their mind but then maybe got distracted and closed out the contact form before hitting “submit.”
Marrying CRMs with Analytics
What goes on behind the scenes with each customer is that 6sense will take the current customer relationship management database, or the list of all positive outbound leads. Then, connect that with a machine learning backbone and 6sense’s own datasets.
The power of machine learning and artificial intelligence is growing every year with massive advancements in computing power and algorithms. An analysis of five and a half million companies has been completed, with enough information to create a “persona” for each company.
Naturally, this is the core of the business and not something Zintak is eager to share detailed information about. However, this same database makes predictions about what stage of the deal a particular lead is in, and guides the client’s marketing team toward making the right moves at the right time.
Who Has My Data?
In 2020, it seems like everyone’s talking about data privacy. The GDPR just came out a few years ago, and a brand-new data privacy law from California has a lot of people again revamping their privacy statements.
But Zintak heads off privacy concerns early.
There is an entire privacy team that exists to track compliance and make sure that the massive amount of data being collected by 6sense is safely protected and anonymized. Meaning that there’s no chance of a massive European or Californian lawsuit slamming the company into oblivion.
6Sense Makes An Average Of $150k Per Customer
So how well have these products worked so far? Well, when Zintak arrived in 2017, they had thirty clients. Now they have a hundred and fifty. The average account brings in $150k per year, though naturally larger customers who use more resources pay more. Server farms aren’t cheap!
Gross revenue churn is low, around 6% yearly, and that’s well offset by 26% expansion with more planned. As for revenue, 6sense passed a $20m run rate as of the end of December 2019. The charge for 3 things.
First is the database size – some companies don’t need worldwide databases and can get all they need with smaller and less expensive ones.
Next is naturally the number of users on the platform. Third, interestingly enough, is the type of AI model used. Some models are more computationally intensive or slower but provide better data, and those are the ones that the largest accounts are willing to pay for.
A Sense of Expansion… Hitting $50M Easily In 2020
In order to achieve that quintupling of clients from 2017 to 2019, one of Zintak’s initiatives was to increase the number of sales agents. When he started there were four, and he’s increased that to 18 quota-carrying sales agents. He wants to double revenue next year, saying he can “easily” hit $50M in annual revenue.
Speaking of quotas, though, one thing he’s glad he did was “let out the rope slowly” with the sales team and not pressure them into unrealistic quotas.
Too many businesses make the mistake of assigning high quotas and investing in a big sales group, and then finding out after squeezing the sales reps to the last penny that the market just wasn’t ready for their product. The first and foremost goal is to grow responsibly and efficiently.
In A Nutshell
6sense is a marketing intelligence platform built on AI and machine learning that allows you to de-anonymize sales and find the right points in time to jump on your leads.
CEO Jason Zintak was brought on in 2017 and has led a push for more aggressive sales and expansion because he believes the value of the company has a great deal of potential past what it’s currently bringing in.
About the CEO Jason Zintak
Favorite Business Book: Ben Horowitz, The Hard Thing About Hard Things
A CEO He’s Following: Marc Benioff at Salesforce
Favorite Tool For Building His Company: Slack
Nightly Hours of Sleep: 6
Family Status: 49 years old, Married, 3 kids
Advice to his 20-year-old self: Every relationship you have is important. Build that network.
Data
Revenue
2015 – 7.2 million annually (estimate)
2019 – 21.6 million annually
Customers
2015 – 30
2019 – 150
Funding
2014 – 16M, Series A (crunchbase)
2015 – 20M, Series B
2019 – 27M
2020 – 40M Series C
Sources
https://www.crunchbase.com/funding_round/6sense-undisclosed–b8d6d891
https://6sense.com/resources/blog/6sense-hits-3x-revenue-growth-in-2015/ – [this blog has a graph of revenue from before 2015]
Author:
Yassir Sahnoun is the founder of YassirSahnoun.com. He helps SaaS companies like Castbox and FluentU attract sales using content strategy, copywriting, blogging, email marketing, & more. If you want to up your content marketing game, you can schedule a free discovery call with Yassir by clicking here.
