To say data is becoming hot on investments would be an understatement. Just last month, the crowdsourced data community for B2B salespeople, Lusha, had raised $40 million in a Series A funding round from PSG, a growth equity firm. In addition, Cognism hit a record revenue of £8.5 million. In 2020, Cognism raised $12 million via AXA Venture Partners and acquired marketing platform Mailtastic. There is also another round of funding expected in this quarter of a similar magnitude. So, why is data becoming a hot topic right now?
Kavita Singh spoke with the CEO of Cognism, James Isilay, and the CEO of Lusha, Yoni Tserruya, to find out firsthand.
1) Sales need it more than ever in remote work
Not to sound like a broken record, but physical events aren’t possible right now and, for sales, that became a major issue in terms of getting quality leads. Lots of companies used events and face-to-face meetings to connect and gain instant leads, but without that availability, marketing and sales need to get accurate data as an alternative, so they’re getting their hands on the right customers.
Yoni explains: “If you think about sales and marketing, sales use CRM, marketing uses marketing automation, and those tools are great, but, without data, those tools are just empty. You need company data to know who to connect with, how to create relationships with potential customers, and how to maintain existing customers, and I think the industry of sales and marketing is transforming more around getting the most relevant customers.”
The more companies start to utilise data, the more they can optimise their own processes. That’s why James points out that the adoption of CRM is also a contributing factor to data.
James says: “A lot of people have switched jobs in the past year. People need to know where people are working currently, what job titles they might have and how to contact them. It can be difficult to contact them. These days, direct lines don’t work anymore, so mobile numbers are so important to have access to, as we don’t have office numbers.”
While email and LinkedIn are still useful, it can be quite oversaturated and difficult to get a hold of people, so there is a need for a more sophisticated tool to make sure you’re getting the right data.
2) People want compliant data to eliminate uncertainty
The EU General Data Protection Regulation protects the privacy and personal data of EU citizens. It has been enforceable since 25 May 2018.
Sales teams are one of the most affected groups by the regulation as personal data is key to reaching the right people at the right time.
B2B data gets used on a daily basis in large organisations, especially enterprises who use outbound sales to grow. While it’s still possible to continue outbound tactics, the new processes and regulations have to be adopted to be GDPR compliant.
However, some companies might’ve halted outbound altogether.
Yoni says: “GDPR defines how companies work with data, what the user can ask from you, and what you need to provide them back, so that’s actually created a set of ground rules. GDPR removed a lot of companies who don’t know how to manage data, but those that are still here, they work according to the rules.”
James adds: “The problem with any regulation is: ‘how is this implemented?’ There’s a big difference between regulation on paper and the interpretation of the regulation. It’s being interpreted differently in different parts of European countries, and they have their own rules on top of that interpretation, and that creates a lot of fear and uncertainty.”
In addition to GDPR, there’s countries like the US who also have to adjust their rules to CCPA (The California Consumer Privacy Act of 2018), which gives users and consumers more control over the personal information that businesses collect about them.
With rules constantly changing depending on your region, navigating around GDPR can sometimes be a headache for marketers, which is where these data compliant companies like Lusha and Cognism come into play.
3) The data industry is constantly evolving
James admits that a while back, a lot of data companies were fizzling out because they were finding it hard to build a good data process that collected data that was both clean and compliant. These were parts of large enterprise companies who weren’t willing to invest at the time. However, the market has evolved and so has the importance of data.
Back in June, ZoomInfo, a competitor of Lusha and Cognism, announced an initial public offering, raking in almost $1 billion in new capital in the largest public debut by a tech company in 2020. Most recently, the company shared its fourth quarter financial results with a revenue of $139.7 million, an increase of 53% year-on-year.
Seeing a company like ZoomInfo make its mark in the tech world is a testament to the growing interest in data, not only for its clients, but for its competitors as well.
James says: “I think the market has gotten to a point and level of sophistication with the demands and need for that data. Now that ZoomInfo has done very well with this IPO, now it’s attracting a lot more investment, so that’s big win for them. The fact that there is a big player out there that has done very well with its IPO process, those are kind of the big shifts in the market. All of these factors have made for a lot of interest and investments for the year.”
