Pipedrive, our favorite sales tool from Estonia, has announced a new $700k seed round from international investors. This brings the total amount of money raised from $300k in September 2011 to $1M as of today. The investors in the round were Satori Capital, TMT Investments and angel investors Andy McLoughlin and Christopher Muenchhoff. McLoughlin and Muenchhoff also participated in the round back in September 2011.
In addition to announcing the funding, Pipedrive is disclosing that it has signed up more than 1000 paying users in April this year. We’re happy to be part of these paying users at ArcticStartup. These customers come from 72 countries and include companies such as KISSMetrics, Udemy, Fortumo, Techstars and Onswipe.
Raising the money was not a straightforward decision to do, as the company is cash flow positive. According to the company however, this helps them reach their goals faster.
Furthermore on July 26th the company announced their API, which it plans to use to extend the service further. One of these extensions is a mobile app to the service.
We also talked to Timo Rein, the CEO of Pipedrive about the round and recent developments.
ArcticStartup: How important has it been for you to get out of the region into the valley?
Timo Rein: It’s not important just for the sake of going to the Valley – but there are several business motives for doing this:
- First, the network of entrepreneurs who’ve done it is so remarkable in the area. It’s so valuable to have these one-call-away opportunities – to learn from people that don’t write books, or perform on stage, but do the work and get the results;
- Second, investors (probably the most concentrated area in the world when it comes to angels and vc-s) not only invest, but also provide brilliant, brutally honest feedback – who else would we ask this from if not from the guys who see hundreds of ideas and companies going to bust and some of them making it;
- Third, products are made on both bleeding need and desire to have something cool in the Valley, but they are always designed to be used for millions – thinking that big, I believe, is like a virus, and we definitely want to be exposed to this virus to execute our ambitions.
ArcticStartup: Why did you focus on US investors as opposed to European ones?
Timo Rein: In fact, we had investors from different parts of the world investing in our last round, both from Europe and US. Then again, it’s true, we’ve been focused more on US investors. While I know from personal experience that investors in Europe are doing excellent work, we just felt that maybe there’s a better chance for us to find the right fit in US.
I mean, there are different sectors which appeal to investors, and we wanted to maximize our options upfront for finding enough investors who are comfortable investing in our space. In addition, we learnt that there’s a breed of investors in US who believe that it’s important to build an excellent product first and find cost effective ways to get it to market, in other words, investors who placed somewhat lesser importance on the company’s ambition of spending marketing dollars to get customers. It resonated so well with our thinking that we just wanted to find these investors, and put ourselves in the best possible position to make a decision on taking or not taking an investment.
Timo Rein has also written a good in depth blog post on how they used Pipedrive to raise the $700k from investors. Definitely good advice to anyone thinking of raising money.