Dealroom Raises €6M Series A for Startup Data & Market Intelligence

Dealroom Secures €6 Million Series A Funding

Dealroom, a European firm specializing in startup and venture capital data, has successfully closed a €6 million Series A funding round, as reported by TechCrunch.

Recent Funding and Market Position

This new injection of capital arrives approximately two years following Dealroom’s previous funding of €2.75 million, secured in early 2020.

Dealroom’s data platform operates within a competitive landscape, directly challenging established North American players such as PitchBook, CB Insights, and Crunchbase – where a previous member of the TechCrunch team was employed.

Details of the Investment Round

Beringea spearheaded the Series A investment. Additional participation came from existing investors, Knight Venture Capital and Shoe Investments, demonstrating continued confidence in Dealroom’s growth trajectory.

To gain deeper insights into the funding round, TechCrunch engaged with Yoram Wijngaarde, the founder and CEO of Dealroom, posing a series of clarifying questions.

The company provides valuable data and analytics to the European startup ecosystem.

Investor Confidence

The continued support from Knight Venture Capital and Shoe Investments highlights their belief in Dealroom’s potential.

This funding will likely be used to expand Dealroom’s database and enhance its analytical capabilities.

Dealroom’s Core Business Model

Dealroom gathers information on privately held companies utilizing both automated web scraping techniques and strategic partnerships. This collected data undergoes a rigorous cleaning process and is then analyzed through the company’s proprietary software to generate “actionable predictions,” as described by Dealroom.

Essentially, Dealroom operates as an integrated system encompassing data collection, meticulous cleaning, and insightful synthesis.

Growth and Market Dynamics

The company’s need for additional capital is driven by the increasing volume of funding events occurring globally. Companies like Dealroom are well-positioned to benefit from this expansion. The private corporate sector, their primary focus, is experiencing rapid growth, and many startups are currently well-funded.

Consequently, Dealroom has a substantial workload and a growing customer base to serve.

Revenue Streams

Dealroom generates revenue through several avenues, including providing an API for both commercial enterprises and governmental organizations. Access to its platform is also offered on a SaaS (Software as a Service) subscription basis.

Furthermore, the company conducts custom research projects for clients. According to Hans Wijngaarde, they currently have 50 government clients utilizing their API, contributing to “about a third of [Dealroom] revenues.”

The company’s revenue is diversified, with approximately equal contributions from investors, business-to-business (B2B) companies, and government entities, as stated by the CEO.

This diversified revenue model ensures Dealroom isn’t overly reliant on any single customer segment.

Government Interest and ARR

The significant proportion of revenue derived from government contracts is particularly noteworthy, and suggests a positive outlook for Dealroom and its competitors. Governments are increasingly focused on the startup ecosystem as it becomes more geographically dispersed.

They are actively investing in resources to gain a better understanding of their local markets and surrounding regions.

Crunchbase estimates that Dealroom will achieve approximately $38 million in ARR (Annual Recurring Revenue) this year.

Funding Strategy

TechCrunch inquired about the relatively modest size of Dealroom’s recent funding round, totaling €6 million.

Wijngaarde explained that the round was strategically “sized” to align with both “business needs” and a desire to avoid over-capitalization. The founder also emphasized that Dealroom benefits from “strong growing revenue, coupled with healthy capital efficiency.”

These factors reduce the immediate need for substantial capital investment and minimize potential dilution for existing shareholders.

Future Developments at Dealroom

Companies like Dealroom and Crunchbase excel in data management – encompassing both acquisition and compilation. Dealroom’s future strategy centers around enhancing the analytical capabilities of its platform.

According to Wijngaarde, the company aims to “expand the predictive power of the platform,” enabling clients to identify high-potential companies even earlier in their development.

Successfully achieving this goal could allow Dealroom to significantly increase its pricing, particularly for investor clients.

A similar objective was pursued by Mattermark, a previous employer, but it presents a substantial challenge.

This undertaking necessitates vast quantities of precise and current data.

Data Collection Costs

TechCrunch sought clarification regarding Dealroom’s categorization of data collection and curation expenses.

Specifically, we inquired whether these costs were classified as a cost of revenue or a marketing operating expense.

Wijngaarde explained that the answer is actually both.

He expressed a desire for a clearer understanding of this cost allocation and anticipates greater transparency when a company within the private market data sector initiates an IPO filing.