Invoca Acquires DialogTech for $100M - Conversational Intelligence Expansion

Invoca Acquires DialogTech in $100 Million Deal to Expand Market Reach

Following an expansion of its marketing call analytics platform last year, designed to provide enhanced insights for sales, e-commerce, and customer experience teams, Invoca has executed its first acquisition. The company has purchased DialogTech, a firm specializing in tools for marketers to analyze inbound phone calls and other customer interactions, in a transaction valued at $100 million according to TechCrunch reports.

Divestiture of Swydo

As part of this deal, Invoca will be selling Swydo, a company DialogTech had previously acquired in 2018. Despite this divestiture, Swydo, which originated in The Netherlands, will continue as a partner to Invoca.

Focus on Enterprise Solutions

Previously, Invoca’s efforts were largely concentrated on larger, consumer-facing enterprises. Its client roster includes prominent names such as ADT, AutoNation, DISH, TELUS, and The Home Depot. The company provides these businesses with an AI-powered platform enabling marketing, sales, and related teams to analyze customer calls.

This platform delivers call tracking, coaching features, and real-time and post-call reporting to streamline operations and improve team performance.

Strategic Alignment and Mid-Market Expansion

Gregg Johnson, Invoca’s CEO – a veteran of Salesforce and a key figure in the evolving marketing and sales technology sector – characterized DialogTech as “complementary” to Invoca’s existing capabilities. He emphasized that the acquisition will specifically enable Invoca to more effectively serve companies in the mid-market segment.

The Enduring Importance of Inbound Calls

Both Invoca and DialogTech recognize that, despite the proliferation of digital advertising, social media, and other customer engagement channels, inbound phone calls remain a crucial component of the sales process, particularly for complex purchases.

Approximately 40% to 80% of revenue is generated through contact centers, and the strategies successful in digital marketing do not necessarily translate to phone-based interactions.

Increased Demand for Enhanced Call Center Tools

The past year has seen a surge in demand for tools that empower call center professionals. With customers increasingly confined to their homes and reliant on virtual channels, expectations for service quality have risen significantly.

Synergies and Combined Capabilities

“This acquisition positions us to be an even stronger partner for enterprises and agencies aiming to optimize marketing and drive sales,” stated DialogTech CEO Doug Kofoid. “The combined entity will offer an unparalleled conversation intelligence solution, boasting leading-edge technology, expertise, and resources.”

Market Position and Growth Potential

The merged company will be a significant player in the “martech” space, specializing in conversational insights. It will serve over 2,000 customers, employ more than 300 individuals, and is projected to exceed $100 million in revenue this year.

However, this represents only a fraction of the overall market potential. The conversational intelligence market was valued at $4.8 billion in 2020 and is forecast to reach nearly $14 billion by 2025.

Consolidation Trends in Sales Intelligence

Considering the number of startups entering the sales intelligence arena, further consolidation is anticipated. Companies are likely to merge to expand platform functionality, increase market reach, or acquire valuable technology more efficiently than developing it internally.

Financial Standing and Future Prospects

Invoca’s last funding round occurred in October 2019, raising $56 million shortly before the onset of the COVID-19 pandemic. Johnson confirmed that Invoca, having raised a total of $116 million from investors including Accel, Upfront Ventures, and Salesforce Ventures, possesses sufficient financial strength to complete the acquisition without seeking additional funding.

However, scaling operations through acquisitions is expected to enhance Invoca’s position for future funding rounds and potentially lead to a higher valuation, particularly given the recent surge in valuations for comparable companies like Gong.