G2 Crowd, a platform that lets businesses search for, compare reviews and pricing for, and then buy software and other IT services — it likes to refer to itself as the “Amazon of business software” — has raised $55 million in growth funding to continue expanding its business.
This round was led by IVP, with participation from enterprise VC Emergence Capital and Accel (Accel led its previous round, which also included LinkedIn as an investor), and brings the company “close to half a billion-dollar valuation,” according to a source close to the company.
This is a big leap: In May 2017, when it last raised money, G2 Crowd was valued at $130 million post-money, according to PitchBook.
The rise of that valuation underscores just how fragmented and competitive the market is for business software today, and how a company that provides a useful way to navigate through that has a very good shot at building a lucrative business.
More generally, a vertical search engine filling a gap in the market and that actually works remains a killer app, despite the dominance of Google in so many areas of search, and of Amazon in so many areas of online commerce.
The other big leap that G2 Crowd has seen has been in its growth in the last 16 months.
Software reviews are a core part of what it offers to people who come to the site — the company likes to compare itself to Amazon, but I’ve previously described it as the Glassdoor of software reviews — and today it has 500,000 verified-user reviews free to browse on its site. That’s more than double the 225,000 reviews it had in May 2017. It has traffic of 2 million “business professionals” monthly, who go to G2 Crowd to browse 58,500 products across 1,200 categories. G2 Crowd also happens to have a very strong SEO game at the moment, with a top slot when you input searches like “Workday competitor.”
While SEO and software comparisons are what might bring in users, what makes money for G2 is that many of them stay to shop for software, and that is what the company will continue building out with this funding.
“We started as a way to help companies make better buying decisions. Now, the focus is on helping them reach their potential through digital transformation, more quickly than ever,” said Godard Abel, CEO and co-founder of G2 Crowd.
It plans to use the funding to ramp up hiring, expand internationally in Europe and Asia and make some acquisitions. “We have our eyes on a few companies that are complementary to our vision and mission,” CMO Ryan Bonnici tells me.
“When it comes to marketplaces, in today’s business climate it’s winner takes all. What Amazon is for consumers, G2 Crowd is becoming for businesses: the place to discover and buy the best business solutions,” said IVP General Partner Jules Maltz, in a statement. “G2 Crowd is disrupting the $3.7 trillion enterprise technology market for buying and selling business solutions, one of the fastest-growing sectors of the global economy. Small businesses to large enterprises like Nike and Facebook trust G2 Crowd to discover and buy the best solutions for their business.” Maltz is also joining the board with this round.
There are, of course, others that offer similar services to G2, with companies like IDC, Forrester and Gartner being strong contenders for enterprises who are evaluating IT purchasing decisions, and others like Owler also hanging in the wings. Investors believe G2 Crowd is king at the moment, though.
“G2 Crowd has the highest traffic and engagement, largest selection of products and services, and highest quality data of any B2B marketplace,” Jason Green at Emergence, said in a statement. “G2 Crowd is already growing at an incredible rate, and this latest funding round will only help them build the next Amazon for business even faster.”
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