CaptivateIQ Secures $46 Million in Series B Funding

CaptivateIQ, the developer of a no-code platform designed for the creation of tailored sales commission structures, has successfully closed a $46 million Series B funding round. Accel spearheaded the investment.

Previous Investment and Growth

The current financing round saw participation from existing investors, including Amity, S28 Capital, Sequoia, and Y Combinator. This brings the total funding secured by the San Francisco-based company since its founding in 2017 to $63 million.

CaptivateIQ’s performance indicates a strong market fit. Despite not yet achieving profitability, the company has experienced a remarkable 600% year-over-year revenue increase. To date, the platform has facilitated the processing of over $2 billion in commissions for a diverse client base.

Broad Applicability and Client Base

“A key driver of our expansion is the platform’s adaptability to any organization utilizing a performance-based compensation model,” explained co-CEO Mark Schopmeyer. “We encounter minimal restrictions regarding the industries we serve.”

Initial discussions typically begin with organizations employing at least 25 sales professionals, although the platform readily accommodates both large enterprises and publicly traded companies.

Significant User Growth

The number of individuals receiving payouts through CaptivateIQ’s system quadrupled in December 2020 compared to the previous year. Furthermore, the company reported consecutive record-breaking months from September through year-end 2020.

Founding and Platform Philosophy

CaptivateIQ was established by Hubert Wong, Mark Schopmeyer, and Conway Teng following their participation in Y Combinator’s Winter 2017 program.

The company positions its SaaS platform as a fusion of spreadsheet familiarity with the scalability and efficiency of dedicated software. This allows users to independently configure complex commission plans, as stated by Teng.

Complexity of Commission Calculations

“Commission calculations are inherently complex and critically important – akin to a sophisticated form of payroll,” Teng elaborated. “Each company possesses a unique commission structure involving extensive calculations and data beyond standard salary computations.”

He further noted that the increasing availability of data enables companies to incentivize employees based on a wider range of performance indicators.

Expansion and Future Plans

Currently, CaptivateIQ employs 90 individuals, representing a threefold increase in staff size over the past year.

In 2020, the startup observed increased adoption from companies outside the traditional high-technology sector. Consequently, CaptivateIQ intends to intensify its focus on these additional verticals, particularly within financial services, manufacturing, and business services.

Impact of the Pandemic

The pandemic proved beneficial to the company’s growth. Schopmeyer highlighted that sales teams traditionally rely on in-person interactions for productivity. The shift to remote work necessitated more effective incentive structures.

“Our product usage surged at the onset of the pandemic as businesses rapidly adjusted incentives, team quotas, SPIFs, and other compensation components to maintain competitiveness,” he stated.

Capital Allocation and Platform Enhancements

The newly acquired capital will be directed towards improving the user experience. Teng indicated plans to introduce “more robust data transformations, an expanded formula set, and pre-built templates.”

Automation and streamlining of the entire commissions process are also priorities. This includes expanding data integrations to encompass “all major data systems” and implementing new dashboarding features. Existing collaboration tools for approvals, inquiries, and contracts will also be enhanced.

Exploring New Applications

Looking forward, CaptivateIQ is investigating the potential of extending its technology to address use cases beyond commissions, a direction suggested by its customer base.

“We are excited by the solutions our users are creating and anticipate enabling further innovation as we continue to release our core technology platform,” Teng said.

Accel’s Perspective

Accel Partner Ben Fletcher explained that the challenges associated with calculating and reporting sales commissions were frequently raised by portfolio companies, with CaptivateIQ consistently recommended. These companies had previously attempted more complex solutions – “investing hundreds of thousands in implementation only to find they didn’t work.”

“Through our research and customer conversations, it became clear that CaptivateIQ offered the superior product in the market,” Fletcher affirmed.

The Value of a No-Code Solution

Beyond its ease of use, Accel recognizes the significance of CaptivateIQ being a no-code tool.

“Like UIPath, Webflow, and Ada, CaptivateIQ empowers users with the power of customer development and automation through an intuitive, drag-and-drop interface,” Fletcher concluded.