ZoomInfo Acquires Chorus.ai for $575M - AI in Sales

ZoomInfo to Acquire Chorus.ai for $575 Million

ZoomInfo has announced its intention to acquire Chorus.ai, a provider of conversational sales intelligence, in a deal valued at $575 million. According to data from Yahoo Finance, ZoomInfo’s stock price has remained stable in premarket trading following this announcement.

Expanding Sales Intelligence Capabilities

The market for sales intelligence is currently experiencing significant growth, leveraging AI to analyze sales interactions and enhance communication between sales teams and their clients. ZoomInfo is primarily recognized for its comprehensive customer data offerings. This acquisition strategically broadens the company’s platform with new capabilities.

The integration aims to create a unified platform encompassing the entire sales cycle. This will be achieved by “merging ZoomInfo’s established strength in lead generation with the actionable insights derived from customer conversations captured by Chorus,” as stated in a company press release.

Insights from Sales Conversations

Henry Schuck, CEO and founder of ZoomInfo, highlighted the benefits of the acquisition in a blog post. He explained that “Chorus empowers organizations to make more informed decisions by providing insights and analytics typically gained only through direct observation of sales and customer success interactions.”

Prior to the acquisition, ZoomInfo’s market capitalization stood at just under $21 billion.

Chorus.ai’s Technology and Growth

Chorus specializes in identifying “smart themes” within sales calls. This functionality assists managers in guiding sales teams towards conversation styles and approaches that are more likely to generate increased revenue. The company possesses the largest patent portfolio in the field of conversational intelligence.

Founded in 2015, Chorus secured over $100 million in funding, as reported by PitchBook. Their latest funding round, a $45 million Series C, occurred last year.

Financial Performance and Valuation

Crunchbase News reported that Chorus had doubled its employee base to over 100 and tripled its revenue in the year leading up to its Series C funding. This rapid growth is highly attractive to venture capitalists, explaining the success of their 2020 funding round.

PitchBook data suggests the company’s final private valuation was approximately $150 million. If accurate, this indicates a substantial return for investors, with the exit potentially more than tripling their initial investment.

Valuation Considerations

Some skepticism exists regarding the accuracy of the company’s reported valuation history, given the growth rates claimed at the time of its Series C funding. A lower valuation would result in a less impressive exit multiple.

Regardless, a $575 million exit represents a significant achievement, even in the current, highly competitive venture capital landscape where larger exits are increasingly common.

The Conversational Intelligence Landscape

The acquisition of Chorus.ai is unlikely to be the last in the conversational intelligence sector. Gong, a major competitor, has garnered significant attention and funding, raising over $500 million. Their most recent funding round, completed last month, valued the company at $7.25 billion.

The combined valuation of Chorus.ai and Gong underscores the substantial value of applying AI to audio data within a sales context, considering the number of customers served by both companies.