Chatbot Builder Drift Gets $32M from GC, Sequoia, HubSpot, CRV
Investors continue to feed the chatbots.
Drift, a Boston-based startup that helps businesses boost sales and marketing efforts with virtual assistants and other software tools, said today it has raised $32 million in fresh venture capital. The Series B round of funding was led by General Catalyst, with contributions from CRV, HubSpot, and Sequoia Capital. Sequoia is a new Drift backer, while the rest previously invested in the company.
Taking the new money into account, Drift says it has raised a total of $47 million from investors. It was founded three years ago by Elias Torres and David Cancel (pictured above, Torres on left), two serial entrepreneurs and former executives at HubSpot (NYSE: HUBS), the Cambridge, MA-based sales and marketing software firm that bought their last startup, Performable.
HubSpot is upping its bet on Drift, but at the same time it seems like the two companies could be competing more with each other. Last week HubSpot acquired Motion AI, a Chicago-based company that also builds chatbots for businesses. Meanwhile, Drift says it intends to invest in tools for marketing automation and sales acceleration, which are areas of focus for HubSpot. Cancel told BostInno he thinks HubSpot and Drift can coexist, and he says Drift is putting a stronger focus on winning large enterprise customers, while HubSpot has been known for serving small- and medium-sized businesses.
Drift’s products include chatbots that interact with visitors to a company’s website or mobile app. If a human isn’t available to chat, the bot will attempt to answer the visitor’s questions. The idea is to help businesses more easily find promising sales leads and close deals more quickly, while improving the buying experience for customers. Drift says the bot can gather the lead’s contact information, attempt to assess the likelihood that lead will turn into a sale, and help schedule calls and meetings, among other capabilities.
“We live in an on-demand world with infinite choice, and yet we force potential customers to fill out forms and jump through hoops in order to talk to us,” Cancel, Drift’s CEO, says in a prepared statement. “Buyers have all of the power today and place a premium on convenience and customer experience. Businesses need to adapt to this shift in order to thrive, and that’s what we’re focused on at Drift.”
Businesses are increasingly turning to text-based messaging assistants to handle tasks, such as automating (at least partially) customer service interactions and helping people shop. Drift isn’t the only Boston-area company building such tools. In March, Insurify launched a chatbot for car insurance shopping, accessible within the Facebook Messenger app. There’s also Talla, which has developed chatbots that businesses use for internal purposes, such as answering employees’ human resources questions and IT requests. Talla and other startups are trying to speed up enterprise adoption of bots, but it’s still early days.
Drift, meanwhile, seems to be picking up momentum in the market. It says more than 50,000 businesses have used its products. It’s unclear how many of them are paying customers, but director of marketing Dave Gerhardt says the number is in the thousands.
In addition to investing in its products, Drift says the new funding will enable it to open a San Francisco office and hire more than 100 people over the next year. The company currently has 55 employees, Gerhardt says in an e-mail.