Sales CRM Pipedrive takes majority investment from Vista Equity Partners to reach unicorn status

Pipedrive, the sales CRM tool for small and medium-sized businesses, is the latest European company to reach unicorn status.

Founded in Estonia and now headquartered in New York, the company has taken a majority investment from U.S. enterprise software-focused private equity firm Vista Equity Partners. This means that Vista has effectively acquired Pipedrive, in the sense that the PE firm now has a majority stake. Multiple sources with knowledge of the deal tell TechCrunch the transaction values Pipedrive at $1.5 billion dollars. The official announcement also makes mention of unicorns.

We’re also told that Pipedrive’s existing investors Bessemer Venture Partners, Insight Partners, Atomico, DTCP and Rembrandt Venture Partners will continue as minority investors in the company. Asked which shareholders exited, a spokesperson for Pipedrive says that this is not a secondary funding round, underlining that all major investors as well as the company’s founders, Timo Rein and Urmas Purde, continue invested in Pipedrive’s potential for further growth in the next few years.

However, it’s clear from my own sources that, as is the case with these type of private equity buyouts, many of Pipedrive’s early shareholders will have exited or partially exited, including employees/management and early backers. This is either voluntary or mandatory as part of a shareholder agreement “drag-along” clause.

Founded in 2010, Pipedrive’s calling card has always been that it is sales software designed to serve first and foremost the needs of sales people, not their managers — built by sales people, for sales people, if you like — but has since matured into a more comprehensive CRM platform play also spanning marketing.

The software integrates with more than 100 other apps used in business, for example Google Apps, Trello, Zapier, Mailchimp, Yesware and PandaDoc. Pipedrive also employs what the company describes as artificial intelligence and automation to help sales teams manage leads and deals more efficiently, and track customer and prospect communications — all with the aim of helping to improve the bottom line.

It hasn’t always been an easy sell, however. When the company raised its Series C round in mid-2018, Rein told TechCrunch’s Ingrid Lunden that there was some skepticism when Pipedrive first launched that it would be possible to make a dent in a landscape dominated by the likes of Salesforce and Microsoft.

“When we entered the market in 2010, people asked us, ‘Why build a product in an area where Salesforce is already strong?’ But having been in sales for more than a decade ourselves, we realized that it’s not just the sheer number of features you offer users. The difference is finding the right spot on the spectrum where you are getting what you need out of a product that you can use,” Rein said. “We have proven that users are migrating from Salesforce and others and are coming to Pipedrive. We definitely have less functionality, but professional salespeople know that performance is largely about your personality.”

Fast-forward to today and Pipedrive claims 95,000 companies use its wares. Cue statement from current CEO Raj Sabhlok: “Reaching ‘unicorn’ status and partnering with Vista will enable us to accelerate our mission to support SMBs as they continue to digitize their businesses in order to grow. Our goal is to successfully deliver on the bold vision that Pipedrive set earlier this year – to provide our users with powerful tools that cover the whole customer journey.”

Adds John Stalder, managing director at Vista Equity Partners: “As more and more small and medium-sized businesses look to accelerate their digital adoption to grow and thrive, Pipedrive has proven itself an invaluable partner with solutions that drive revenue growth to its customers. We see a tremendous opportunity to work with the Pipedrive team and their partners to continue to grow the business and serve small and medium-sized businesses globally”.

Meanwhile, Pipedrive’s unicorn status adds to a decent run for Atomico, the European venture capital firm founded by Skype’s Niklas Zennström. The VC has seen three of its portfolio companies achieve unicorn status this year (being valued by investors at $1 billion or more): Pipedrive, Lilium and MessageBird. Another Atomico investment, Klarna, also achieved so-called “decacorn” status with a valuation of $10.6 billion.

“Pipedrive is now Europe and Estonia’s newest SaaS unicorn,” says Zennström. “While financially rewarding for longtime Pipedrive founders, employees, and shareholders, it’s more importantly a strong re-affirmation — from one of the world’s leading SaaS PE firms — of the mission started by Timo, Urmas, Ragnar, Martin Henk and Martin Tajur to make salespeople successful around the world. We are proud to have partnered with Pipedrive since we led their Series B in 2017, and believe the company is now well and truly on track to become Europe’s next global SaaS success story. That’s why we have doubled down as part of this latest investment and are excited to continue the Pipedrive journey with Vista at the helm. On a personal note, I am really proud to see another global leader emerge from Estonia with some ex-Skypers as key executives”.