G2 Raises $157M to Fuel Software Review Platform Growth

G2 Secures $157 Million in Series D Funding, Reaching Unicorn Status

This morning, G2, a leading provider of online software reviews and information, announced the successful completion of a $157 million Series D funding round.

According to a press release shared with TechCrunch prior to the public announcement, G2’s valuation has surpassed $1 billion, officially designating it as a unicorn.

Investment Details

Permira spearheaded the investment through its growth fund. Existing venture capital firms, including IVP, Emergence, and Accel, also participated in the round.

The funding also included contributions from LinkedIn, a previous investor, as well as corporate venture capital from HubSpot and Salesforce.

The Significance of G2’s Position

The funding round is noteworthy not simply for its size – substantial investments are commonplace in today’s venture capital landscape – but for the unique role G2 and its competitors play within the technology sector.

These platforms act as guides within various software categories, presenting a comprehensive overview of competing services and offering insights to aid purchasing decisions.

Providing direction to potential buyers – essentially, all companies – in the vast software market is a powerful position.

However, this position also presents a distinct set of challenges.

Maintaining Trust and Integrity

G2’s success hinges on its ability to establish and maintain trust. Concerns regarding the influence of commercial interests on its ratings and rankings could severely damage its core offering.

TechCrunch posed this question directly to G2 CEO Godard Abel.

Abel asserted that a vendor’s payment status has “no impact on their rating on G2 and their placement in our category rankings, which are 100% algorithmic and data-driven.”

He further explained that G2 rigorously verifies all reviews, confirms the “business identity” of reviewers through their online profiles, and employs “NLP and AI to score and validate all reviews, including preventing submissions from competitors or vendor employees.”

Human oversight is also incorporated into the verification process, according to the CEO.

While the process appears sound, G2 and its competitors, such as Capterra, must prioritize maintaining market trust as they expand.

Growth Metrics and Future Plans

Abel elaborated on the growth metrics disclosed in the company’s release, specifically mentioning the addition of “700 paying customers for its Marketing Solutions in the past 12 months.”

TechCrunch inquired about the percentage growth represented by this figure and the proportion of G2’s revenue derived from this business line.

Abel stated that this customer growth represents a 45% increase and that this “piece of [its] business represents the bulk of [its] current revenue.”

This customer growth within a major revenue stream suggests positive overall growth, although a complete assessment requires additional financial data.

Looking Ahead

With significant new capital available, G2 is well-positioned for continued expansion.

The CEO highlighted international investment as a key area of focus, noting “exceptionally strong growth across Europe and Asia as our international software buyer traffic and revenue have been nearly doubling.”

Furthermore, G2 intends to “accelerate” its software market coverage and invest in data initiatives to enhance its recommendation engine.

G2’s current valuation reflects a company potentially on a path toward an Initial Public Offering (IPO), which means increased scrutiny and higher expectations will be applied moving forward.