Startups

OKR-focused Gtmhub raises $30M Series B after growing 3x in 2020

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Image Credits: Mimi Thian (opens in a new window) / Unsplash (opens in a new window) (Image has been modified)

This morning Gtmhub, a multinational startup that builds software to help other companies manage their corporate planning, announced that it has raised a $30 million Series B. The round was led by Insight, and included both participation from new investor Singular and prior investors LauncHub and CRV.

Gtmhub raised capital around 13 months ago, a $9 million Series A. At the time, the new capital was larger than the aggregate of its preceding funding efforts. The startup’s new funding round, like its 2019 Series A, towers above its prior fundraising totals in a similar manner.

How has Gtmhub managed to raise so much money? In a word, growth.

TechCrunch reported at the time of its Series A that Gtmhub had managed 400% growth in annual recurring revenue (ARR) heading into the round, on a year-over-year basis. Similar levels of topline expansion have continued, with Gtmhub COO Seth Elliott telling TechCrunch that the company grew its ARR by a multiple of three last year (measured December 2019 through December 2020).

Around the time Gtmhub raised in 2019, a number of other startups focused on the same software market raised as well, leading to TechCrunch asking “why is everyone making OKR software?

The acronym OKR translates to “objectives and key results,” a planning method that has become popular among American technology firms, and, according to Elliott, is becoming more popular internationally and among non-technology companies.

The startup executive also told TechCrunch that he sees Gtmhub growing alongside two business trends. The first, the rise of OKRs themselves, is a wave that his company is riding, he told TechCrunch. The second, one that he thinks his startup is leading, deals with large companies pursuing corporate transformations to boost their agility; those firms are adopting Gtmhub, he said, which can help them execute their digital transformation, or similar efforts, successfully.

It’s not a big surprise that large companies looking to rejuvenate their operations might want a new planning method to help keep their staff pointing in the same direction, and Gtmhub has long had an enterprise bent.

That enterprise focus performed well for the company last year, we learned. TechCrunch asked the company for updates on its annual contract value (ACV) results and gross margin levels during our discussion of its new round. In 2019, at the time of its Series A, the company said that it had grown its ACV by 650% in the preceding year. The COO told TechCrunch that that figure rose by a factor of 10 in 2020, implying success in selling to large companies. And, Elliott added, the total number of paying users of the service also rose by a factor of 10 during the year.

The company’s gross margins held up to their roughly 90% levels set in 2019, it said.

Given those results, it’s not a surprise that Gtmhub was able to raise another round more quickly than the startup-standard 18-month timeline would have had us estimate.

The round came together quickly. According to Elliott, Gtmhub started to chat with investors outside of a formal process in early November, kicking off a more serious effort to raise capital by the end of that month. The round was closed as 2020 concluded.

It will be interesting to see if other startups working on the software category that also raised money around a year ago will also now raise more capital. The names on our watch list regarding that question include WorkBoard and Ally. There are other players in the space as well, like Perdoo, that we’d love to hear from when it comes to their own 2020 growth.

Gtmhub declined to share its 2021 growth plans with TechCrunch.

The larger lesson from this round is that even inside of a software niche that you might have dismissed as overly narrow — namely OKR-focused software — is in fact large enough to support a handful of high-growth startups. That applies broadly, and underscores a little of the pace of the venture and startup industries in the last few quarters.

 

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