ZoomInfo Invests $575 Million In Chorus.ai As Artificial Intelligence Disrupts The Sales Market
ZoomInfo invests $575 million in Chorus.ai as artificial intelligence disrupts the sales market
ZoomInfo announced this morning that it is in the process of acquiring Chorus.AI, a conversational sales intelligence tool, for $575 million. ZoomInfo's shares remained unchanged in pre-market trading following the news, according to data from Yahoo Finance.
Chorus's market is sales intelligence, which leverages artificial intelligence to "listen" to sales conversations in order to improve interactions between salespeople and customers. ZoomInfo is primarily known for providing customer information, so the acquisition significantly expands the acquiring company's platform.
The company sees an opportunity to unify various aspects of the sales process in a single platform by "combining ZoomInfo's historic top-of-the-funnel strength with insights gleaned from Chorus's captured customer conversations."
“With Chorus, the entire organization can make better decisions by surfacing insights and analytics that would be impossible to obtain without sitting in on every sales or customer success call,” ZoomInfo CEO and founder Henry Schuck wrote in a blog post announcing the deal.
ZoomInfo was valued at just under $21 billion prior to the transaction.
Chorus analyzes sales calls for what it refers to as "smart themes," which help managers steer sales teams toward the types of conversation and tone that are most likely to generate revenue. Indeed, Chorus claims to have the largest patent portfolio in the field of conversational intelligence.
More About Chorus
Chorus was founded in 2015 and has since raised more than $100 million, according to Pitchbook data. Last year, the company raised a $45 million Series C round.
According to Crunchbase News, Chorus had “doubled its headcount to more than 100 employees and tripled its revenue over the last year” at the time of its Series C round of funding. That is the type of growth that venture capitalists seek, making the company's 2020 funding round a foregone conclusion.
Notably, PitchBook data indicates that the company's final private valuation was around the $150 million mark; if accurate, this indicates that the company's most recent private round was costly in terms of dilution. And that its investors did well on the exit, quickly more than tripling their initial investment, with early investors doing even better.
However, given the company's claimed growth at the time of its Series C, we're slightly skeptical of its available valuation history; it feels low. If this is the case, the company's exit multiple will decrease, resulting in a slightly less impressive final sale price.
Naturally, a half-billion-dollar exit is significant, even if venture capitalists are more interested in $1 billion and larger exits in today's hot and expensive market.
Chorus.ai's exit from the conversational intelligence space is unlikely to be the final one. Gong (often referred to by its URL, Gong.io) is one of the more well-funded startups in this space, having raised more than $500 million. It raised $250 million last month on a $7.25 billion valuation.
The Chrous.ai exit and Gong's massive private valuation imply that applying AI to audio data in a sales environment is extremely useful, given the combined customer base of the two companies.
