usergems Raises $20M to Compete with ZoomInfo

The Pursuit of Efficient B2B Prospecting and UserGems' $20 Million Funding

Identifying potential customers and concentrating efforts on those most likely to convert, while minimizing time spent on uninterested parties, represents a significant challenge in sales and marketing. UserGems, a startup leveraging AI and data mapping, has secured $20 million in funding to address this very issue.

Series A Funding Details

This Series A round is spearheaded by Craft Ventures, with participation from Battery Ventures, Tiger Global, and returning investor Uncork Capital, alongside contributions from individual angel investors. The total funding raised by UserGems now amounts to $22.4 million.

UserGems currently serves approximately 90 customers within the mid-market sector, including companies like Procore, Medallia, UserTesting, Sisense, and BrightTALK. The newly acquired funds will be allocated to both product development and talent acquisition.

The Origin Story of UserGems

Headquartered in San Francisco, UserGems’ inception stems from an intriguing narrative of entrepreneurial evolution.

Christian Kletzl, the Austrian CEO and co-founder, relocated to Chicago after completing his MBA at Northwestern University. He subsequently persuaded his twin brother, Stephan, who was working at PwC in Europe, to join him in launching a startup.

Their initial venture, ShelfFlip, aimed to provide a more streamlined e-commerce platform for selling used goods, competing with established players like eBay and Craigslist. The pair applied to Y Combinator with this concept and were accepted.

From ShelfFlip to UserGems: A Pivotal Shift

The brothers developed software to monitor customer movements – specifically, tracking when key contacts at SmartHires transitioned to new companies. This capability resonated strongly with fellow Y Combinator participants, exceeding their interest in SmartHires itself.

“The enthusiasm for tracking customer movements surpassed the interest in our primary company, leading to the birth of UserGems,” Kletzl explained. “We’ve essentially pivoted twice since our initial YC experience.”

Core Principles Driving UserGems

UserGems is founded on the understanding of evolving sales and marketing dynamics, coupled with the increasing fluidity of the modern workforce.

The traditional notion of lifelong employment is fading, giving way to “the great resignation.” Data tracked by UserGems reveals that at least 20% of individuals change jobs annually, making it challenging to maintain accurate contact information.

Simultaneously, sales and marketing have become increasingly data-driven, with an abundance of information and tools available for managing and analyzing customer interactions. However, success rates remain significantly higher when engaging with individuals already familiar with a company or its offerings.

How UserGems Works

UserGems bridges these two trends by integrating with existing CRM systems. It tracks past customer interactions, enabling sales and marketing teams to reconnect with contacts as they move to new organizations, identifying them as “prime candidates for marketing.” Kletzl describes this as “a treasure trove to utilize in the sales process.”

He emphasizes that while the practice of maintaining detailed contact records is not new – successful salespeople have always done so – UserGems allows organizations to achieve this “at scale.”

Machine Learning and Predictive Capabilities

UserGems’ platform extends beyond initial contact establishment. Machine learning algorithms analyze user interactions to recommend optimal outreach targets, based on product usage patterns and other relevant signals, increasing the likelihood of conversion.

Competitive Landscape

UserGems competes with platforms like ZoomInfo and LinkedIn, which facilitate sales prospect identification. It also operates within the predictive sales space, alongside companies such as People.ai, LeadIQ, and 6sense.

Given the ongoing trends in employment turnover and the resulting complexities in sales, innovative solutions like UserGems are poised to attract continued investment, as evidenced by Tiger Global’s participation.

Industry Perspective

“Today’s B2B sales and marketing professionals struggle to stand out amidst the noise—often relying on the same demand generation tactics and sending countless generic emails,” stated Brian Murray, partner and COO at Craft Ventures. “UserGems recognizes the value of past users as future opportunities and has become a vital asset for rapidly growing teams, boosting pipelines, improving win rates, and reducing customer churn.”