Three years after its launch, HubSpot Ventures is back with a $100 million fund, its CRM Platform Fund that will invest in early- and growth-stage technology companies focused on customer-first, business-to-business innovation for scaling organizations.
“Our mission is to help organizations grow better through relationships, access to customers and customer service,” Andrew Lindsay, senior vice president of corporate and business development at HubSpot, told TechCrunch. “We have an opportunity to invest in those to help HubSpot better serve customers.”
The corporate venture capital firm, for customer relationship management platform HubSpot, often invests in companies that are also HubSpot customers and has over 121,000 companies of all sizes and stages using its software that it wants to invest in, he added.
The latest fund follows a $30 million fund that the firm launched with in 2018 that was aimed at providing startups with the financial and educational resources for growth. In 2020, the company also committed $20 million to social impact investments, with its first funding going to the Local Initiatives Support Corporation’s Black Economic Development Fund.
It also partnered with Howard University and donated to create the university’s first Center for Digital Business, where students can receive academic and professional training to help launch careers in business and technology.
This year, HubSpot made 12 investments in fast-growing startups such as Clari, Descript, Reachdesk and QuotaPath. It made a total of 25 investments through the prior fund, and Lindsay expects to continue at the same pace with the new fund.
“HubSpot and Clari both work to align teams to drive revenue growth — HubSpot through its powerful CRM platform, and Clari through our purpose-built revenue operations platform,” said Andy Byrne, CEO at Clari, in a written statement. “It’s a natural fit to have the support of a company that shares our commitment to helping customers realize their fullest potential by transforming their revenue operations. We’re excited for what the future holds as we work together to bring revenue operations to every business.”
Andrew Lindsay. Image Credits: HubSpot Venture
The firm doesn’t typically lead investments, but participates with top investors like Andreessen Horowitz, Sequoia Capital and Coatue.
The firm has “a strong sense of how we, as a company, work with customers,” Lindsay added. One of the unique aspects of an investment is providing value not available elsewhere on HubSpot’s platform, like insights on how to grow their business, marketing, sales, revenue and operations. In addition, not only are the invested companies often HubSpot customers, the company is in turn often customers of theirs, which means that they have the expertise to provide advice and support growth, he said.
Lindsay is seeing accelerated growth among CRM companies driven by the digital transformation, and HubSpot has been a beneficiary of that. For every dollar invested, the firm is seeing $5 of revenue generated by the ecosystem. He expects that to grow even faster, especially given stats showing the global CRM industry is poised to be a $43.5 billion market by 2024.
“Venture can be a force multiplier for that growth,” he added. “We are a platform that customers like working with and are easy to partner with. Not all companies are the same. Companies often have to choose their investor, and they are choosing us based on culture and approach.”