Is Drift trying to eat HubSpot’s lunch?
While the Boston startup founded by former HubSpot executives might not admit to that, several signs indicate that Drift is trying to upend and become a better solution for a term that HubSpot first coined: inbound sales and marketing.
At Drift’s inaugural Hypergrowth event on Monday evening, Drift CEO and co-founder David Cancel told an audience of roughly 1,000 that the existing tools used for sales and marketing no longer work for the way people live. More specifically, things like forms and automated emails — which are two components of HubSpot’s platform — just don’t cut it.
“Our revenue growth is faster than HubSpot and other [software-as-a-service] companies in their history at this point.”
“All of those emails aren’t coordinated,” Cancel said of the way traditional email automation tools work. “And I should know,” he added, “I built marketing automation and sales enablement software for a long time. Even the systems that I spent building don’t do this.”
It was no coincidence that Drift held Hypergrowth on the first day of HubSpot’s flagship Inbound conference for sales and marketing professionals this week.
And yet HubSpot is participating in Drift’s new $32 million Series B round, which was announced on Tuesday and was led by new investor Sequoia and existing investors General Catalyst and CRV. So while the two companies intend to coexist, Cancel and his co-founder, Elias Torres, are clearly trying to build something that can become bigger.
“Our revenue growth is faster than HubSpot and other [software-as-a-service] companies in their history at this point,” Cancel told BostInno last week. He declined to provide any specifics on the company’s revenue or its growth, only saying that “thousands” of the more than 50,000 businesses that use Drift are paying customers now.
The new financing round, which brings Drift’s total funding to $47 million, will be used to expand Drift’s sales and marketing products, open its San Francisco office and hire more employees. With around 55 employees right now, Drift plans to reach 85 at the end of the year and nearly 200 by the end of 2018, Cancel said.
Cancel said the company’s existing investors approached Drift for this round before it ran out of money from its $15 million Series A in 2015. “But what they saw was this inflection point we were hitting,” he added, so they decided to pour on the gasoline.
Drift provides a conversational sales and marketing platform that appears as a chat window in the lower-right corner of a company’s website. The idea is that it allows companies to directly speak with customers and prospects visiting the site and help close sales faster. If a human employee isn’t available to answer a message on Drift, a chatbot can answer questions for customers, route them to the appropriate employee and schedule meetings.
“The less crappy emails we send, the more likely we are to buy and work with this company.”
“The common theme of our customers is how fast we’re accelerating sales for them,” said Cancel, who added they have been able to identify $1-2 million in new sales opportunities. One customer, RapidMiner, has seen so much traction from Drift, the company created a new position dedicated to the platform. Other customers include Cybereason, Rapid7 and Toast.
At Monday’s event, Drift announced a new email marketing component that Cancel said would be smarter and more efficient than other systems. Instead of bombarding customers and prospects with multiple emails from different teams, Drift’s system will be aware of all the conversations people are having across all channels, including Drift’s chat component, allowing the system to send fewer messages that are more personalized.
“The less crappy emails we send, the more likely we are to buy and work with this company,” Cancel said, describing the intended effect for companies using its system.
On the question of whether Drift is trying to compete with HubSpot, Cancel said his company is aiming more for large enterprise customers — even though that is a customer segment HubSpot is trying to penetrate. HubSpot’s all-in-one platform has worked better for small- to medium-sized businesses, Cancel said, but it hasn’t worked as well for enterprises because of the large size of their organizations and their diversity in software preferences.
“There’s a world where we coexist, and they’re the all-in-one platform for [small- to medium-sized businesses] and we’re really focused on marketing and sales above that base,” he said.