Lusha Raises $205M Series B at $1.5B Valuation - B2B Sales Data

Streamlining Lead Generation with Lusha

The process of identifying potential customers can be remarkably time-intensive for many sales and marketing departments. Lusha, a B2B sales intelligence platform, addresses this challenge through a crowdsourced database designed to refine prospect lists and pinpoint the most promising leads. Established in 2016, the company operated on bootstrapping until securing its Series A funding nine months prior.

Achieving Unicorn Status with Series B Funding

Lusha recently announced its attainment of unicorn status, following a $205 million Series B funding round. This investment values the Tel Aviv-based startup at $1.5 billion.

The funding round was spearheaded by growth equity firm PSG, with ION Crossover Partners also participating. This brings Lusha’s total funding to $245 million, including a previously announced $40 million Series A in February.

Growth and Future Plans

According to co-founder and CEO Yoni Tserruya, Lusha has experienced a tripling of its growth rate since its initial external funding. The company intends to allocate these new resources to enhance its go-to-market strategy.

Specifically, the Series B funds will be directed towards improving Lusha’s data infrastructure, developing new features, ensuring privacy compliance, and expanding its market presence within the United States.

A Growing User Base

Lusha’s user community, which actively contributes data such as company details and contact information, currently comprises over 800,000 sales professionals and 273,000 sales organizations. This includes prominent technology companies like Facebook, Google, Dropbox, and Uber.

The majority of Lusha’s clientele are B2B SaaS businesses, though the platform is also utilized by venture capital firms, investors, and recruitment agencies.

Key Features and Integrations

Lusha provides a browser extension that displays crucial information about companies, including industry, size, revenue, and key sales contacts.

A dedicated “prospecting tool” enables users to segment leads into specific customer profiles. Furthermore, Lusha offers both API access and integrations, allowing seamless incorporation of its database into existing sales and marketing software systems.

The company maintains alignment with GDPR and CCPA regulations, proactively notifying individuals when they are added to the database, granting them the ability to review or remove their contact information.

Origins and the Need for a Better Solution

Lusha was founded five years ago by Assaf Eisenstein and Tserruya, stemming from their observation that conventional social networks were ineffective for generating high-quality sales leads.

Tserruya explained to TechCrunch that while social networks facilitated outreach, the process was often inefficient and plagued by excessive noise. Despite this, the fundamental need for sales and marketing professionals remained constant.

Cutting Through the Noise

Lusha was conceived to overcome this noise and assist sales and marketing teams in identifying individuals most receptive to their communications.

From Waze for Salespeople to Data Accuracy

Initially, Lusha functioned as a “Waze for salespeople,” as described on the company’s website. The introduction of crowdsourced data generated a network effect. Early data accuracy was a challenge, but the company evolved to prioritize data precision and depth as key differentiators.

This shift led to a focus on expanding its user community, encouraging contributions and data validation.

The Impact of Remote Work

Current market trends, particularly the continued prevalence of remote work, are positively influencing Lusha’s services. Tserruya noted that sales teams are now less able to engage potential buyers in person.

Companies that previously relied on conferences for lead generation are now compelled to adopt remote strategies, often while operating remotely.

Freemium Model and Data Focus

Lusha operates on a freemium model, offering limited data access to free users and unlocking additional features through subscription packages.

The platform allows sales teams to locate contact information for decision-makers, but Tserruya emphasizes that it exclusively includes professional details, excluding personal data, for its database of over 100 million contacts. User feedback continually refines Lusha’s algorithms and data sets.

Moving Beyond “Spray and Pray”

Lusha’s database, search capabilities, and recommendation algorithms represent an advancement over the “spray and pray” approach, where sales and marketing teams indiscriminately contact numerous leads.

Tserruya highlighted that salespeople often spend a significant portion of their time on administrative tasks and data aggregation, hindering their core selling activities.

He stated that a lack of data and intelligence wastes valuable time for sales teams, driving more companies to adopt a “super-targeted” sales process, focusing on precisely identifying the right contacts and their motivations.

A Shift in Sales and Marketing Tactics

This trend mirrors a broader shift in marketing that occurred roughly a decade ago, with companies transitioning from mass-market advertising like billboards and TV commercials to targeted ads on platforms like Facebook and Google.

For instance, a CRM software vendor would strategically target early-stage companies, recognizing that once a system is chosen, it typically remains in place for years.

Identifying Optimal Engagement Timing

Tserruya explained that understanding a company’s lifecycle is crucial for effective outreach. Key triggers, such as the hiring of a VP of Sales or the onboarding of initial sales personnel, signal opportune moments for engagement.

He emphasized that Lusha aims to provide this timing and lifecycle understanding to B2B SaaS companies.

Competitive Landscape

Lusha’s primary competitor is ZoomInfo, a major data provider to sales and marketing teams.

Tserruya differentiated Lusha by emphasizing its focus on enterprise clients, the superior quality of its data – continuously improved through user feedback – and its ease of use, allowing businesses to begin utilizing the platform without direct sales interaction and scale their membership as needed.

Investor Confidence

Gili Iohan, general partner at ION Crossover Partners, expressed confidence in Lusha’s progress and execution in a statement regarding the investment. He noted that Lusha is becoming an essential tool for sales teams seeking to optimize their outreach and improve win rates.