Gong today announced a $65 million Series C financing led by our friends at Sequoia Capital. The financing is significant in that it recognizes Gong as the undisputed market leader in the new “Revenue Intelligence” category. It is also a powerful illustration of one of Wing’s investment theses in action: the “Virtuous Data Cycle”, which is driving an entirely new generation of data-first, AI-powered business applications.
As we described in our 2016 post, the next generation of business applications are being built with data at their core. These applications are “data-first, AI-powered”, and offer value propositions that go well beyond incumbent “systems of record”. A hallmark of the new generation is the “virtuous data cycle”, in which the use of the application generates a new, synthetic data set that is itself the basis for additional functionality. In the case of Gong, the initial data set utilized by the application is raw communications data: voice calls, videoconferences, emails, meetings and the like. Gong processes this raw data to derive a far more valuable set of insights that help improve situational awareness, sales team performance and revenue results. Gong calls this “Revenue Intelligence” and it has rapidly become a must-have capability for the modern sales team.
Key implications include:
- The data-first, AI-powered business application is not just a data consumer but also a data generator, and the “data exhaust” is ultimately its greatest value.
- These applications are not just analytical tools but rather bona fide operational applications. Their rising prominence is driven by the fact that we are increasingly leveraging machine intelligence to help us run our businesses.
- Although data-first business, AI-powered applications appear to be complementary to incumbents at first, they are already capturing beachheads that will allow them to disrupt entire enterprise software categories—and create new ones.
- The cycle isn’t new but its impact on the enterprise is. Consumer tech companies such as Google and Facebook have been data-first and AI-powered for years. What is new is that this phenomenon is now penetrating business markets.
Gong is the canonical example of the data-first, AI-powered approach in CRM. Gong represents true customer reality to sales organizations, eliminating the need to rely on biased opinions and manual processes. The system captures customer interactions at their source, leverages AI to understand these interactions (“synthetic data”), and delivers actionable insights to salespeople and managers. The company has invested heavily in its artificial intelligence, including its natural language processing and machine learning algorithms, but its success can be attributed to a laser focus on solving a real business problem. As a result, “salespeople love Gong.” When have you heard any salesperson say that she loves their CRM?
More broadly, we now observe the impact of the Virtuous Data Cycle across the enterprise software landscape. In the below table, we highlight several examples where Wing companies are using data and AI to transform traditional enterprise software categories.
We wish to congratulate the entire team at Gong on their tremendous progress. Gong was founded by Amit Bendov and Eilon Reshef, and it has been our honor to partner with them in their journey. As stated in today’s announcement, the company already has 800 companies and 45,000 salespeople as customers—four years from founding. In my 23+ years of venture investing in enterprise technology, it is rare to find a company like Gong, which combines such a world-class entrepreneurial team, clear and compelling product-market-fit, and unrivaled go-to-market excellence.
For more information on Gong and Revenue Intelligence, check out the InnovAItors podcast featuring Amit.