A $25M Series B convinced Crossbeam to give away its services for free - Technical.ly Philly

Growth

Aug. 6, 2020 9:33 am

A $25M Series B convinced Crossbeam to give away its services for free

How fundraising made cofounders Bob Moore and Buck Ryan rethink how to build value within their partner ecosystem platform.
Crossbeam’s office mural in Center City’s Philadelphia Building.

Crossbeam's office mural in Center City's Philadelphia Building.

(Courtesy photo)

A year and a half into partner ecosystem platform Crossbeam’s existence, cofounder and CEO Bob Moore says the team has begun playing the long game.

It’s the strategy behind a new move to make a tier of services on its platform entirely free, which goes into effect Thursday — a move made possible by a new Series B raise.

Crossbeam lets organizations share data that may be mutually valuable about common users or customers; Moore has called its services a “collaborative intelligence platform” and “LinkedIn for data.” The free tier allows companies to use Crossbeam’s entire platform, including access to thousands of overlapping data points with their partners and full integrations with Salesforce, HubSpot and Slack, plus the company’s account mapping and reporting workflows, custom notifications, threads, unlimited users and unlimited partners.

The company will continue to offer upgraded, paid services for members who want that access, but for those who get all the services they desire in the free tier, they won’t pay a dime. Moore dove more into services in a blog post published today.

And yes, it’s all thanks to a new round of fundraising — a $25 million Series B lead by Bay Area-based Redpoint Ventures. Existing investors FirstMark Capital, Salesforce Ventures, Slack Fund and Uncork Capital also participated in the round, along with new investors Okta Ventures and a syndicate of partnership executives from Partnership Leaders.

“Raising money gave us an opportunity to say, ‘What does the most valuable part of this business look like in six months? In five years?'” Moore told Technical.ly. “To give away more for free. What we offer might be all a company needs, because maybe they are partnered with another company, but being more generous on the free side of services will encourage growth.”

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It will create an opportunity for Crossbeam’s paying customers to scale more quickly, as free clients get access to more data for partnerships. And once you come to rely on and trust a service, you’re more likely to stick around. It’s a cue taken from Moore’s last startup, Stitch, which had a “genius” free tier it allowed companies to use for a few months so they’d eventually want to upgrade, Moore said. (It also reminds of a similar move by fellow Philly tech darling Guru, which raised a bunch of money this year, too.)

“It will encourage those who do pay us to scale faster,” Moore said. “It’s a bet to play the long game.”

Crossbeam cofounders Bob Moore (L) and Buck Ryan. (Courtesy photo)

But fundraising wasn’t always part of the plan for 2020, Moore said (although what about this year has gone to plan?) The leadership team had been eyeing the following year as a likely time to launch another round of fundraising after last August’s $12 million Series A, but Redpoint approached the company in June looking to make an investment.

It’s a relationship Moore said was built back in the days of RJ Metrics, his first startup. (“We pitched them, but they passed,” he said.)

“When the pandemic hit, we did what most companies did, took the advice of wisdom and slowed down hiring, and just went heads down for a while, waiting to make sure that underlying assumptions about how we were creating value didn’t go up in smoke,” Moore said. “We took stock with the round in Q2, when Redpoint approached us in June and saw we had our best quarter ever. In retrospect [the fundraising] makes a lot of sense.”

The $25 million means that Crossbeam can afford to offer these free services to any of its 900+ clients, which in turn, will bring more users onto its platform. It also means the team has room to grow from its current status of 28 employees to about 50, a goal for early 2021, Moore said. There will be hiring across the board at the company, but big investments will go into the sales and engineering team.

There’s also hope to bring more roles into leadership, like a head of partnerships — “I know, head of partnerships at a company that runs partnerships, pretty meta,” Moore said. Redpoint Partner Logan Bartlett will also be joining the company’s board of directors.

And while a majority the team is based here in Philly, the entirety of Crossbeam’s existence has been remote-friendly, Moore said. On any given day, an employee could opt to work from home, no questions asked. It’s allowed for a smoother transition to foreseeable WFH plans because of the pandemic, and continue the option to make those future positions remote as well. But the cofounder said the team is itching to get back to HQ at The Philadelphia Building when it’s safe to do so.

“Our HQ is Philly, we love Philly, our center of gravity is Philly,” Moore said.

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