A Vancouver startup whose time-saving software has caught on with sales professionals during the pandemic has raised money for the third time in eight months, bringing in US$100-million combined from some of the top early-stage financiers in the U.S.
Dooly Research Ltd. said Thursday it had raised US$80-million in a “Series B” funding (or second venture capital round) led by Spark Capital and backed by Greenspring, Tiger Global and Lachy Groom. Spark and Tiger also teamed up recently on a US$130-million financing of Toronto chatbot provider Ada Support.
Dooly closed the deal in April, six months after it raised US$17-million in its Series A funding led by Addition. That in turn came seven weeks after Dooly raised US$3-million in seed funding led by Boldstart Ventures. Other Dooly backers include Battery Ventures, Boxgroup, ScaleUP Ventures and pop group the Chainsmokers.
“We’ve hit this really important vein in the future of work that is leading people to our platform in droves,” Dooly CEO Kris Hartvigsen said. “We saw meteoric growth, then investors came at us.”
Raising three successive financings at increasingly higher valuations – Dooly, now worth US$300-million, saw its valuation increase more than 15-fold over that stretch – so quickly is rare, if not unheard of, for a Canadian technology company. But it is also uncommon in the United States, said Ed Sim, managing partner with New York-based Boldstart. “I’ve been investing in enterprise startups for 25 years and I have not seen any company that has gone from virtually unknown seed to Series B as fast as Dooly has.”
The reason for the buzz is that Dooly – which had eight employees in September and is now at 40 – has been putting up head-turning numbers for an enterprise software startup. It sells a note-taking program that salespeople use during calls. Unlike existing software such as Evernote, Dooly’s artificial intelligence-powered program automatically pushes out content entered by users to update files in other tools such as Salesforce, Slack and Google Workspace. By cutting out the need to re-enter data, users save three to 15 hours a week of what Mr. Hartvigsen describes as low-value “toilet cleaning” tasks of their job so they can focus on prospecting, selling and closing.
Dooly is far from the only startup to create time-saving tools for sales pros; the list includes Canada’s Introhive Services Inc. and San Francisco-based Scratchpad, Inc. and Gong.io Inc. Salesforce.com Inc. provides a free note-taking tool called Quip. “There are lots of companies trying to solve this problem but Dooly has nailed it” with a product that is simple and intuitive, Mr. Sim said.
Dooly has posted strong numbers driven by high adoption and word-of-mouth referrals. The number of organizations using Dooly has increased about 10-fold to 500 since early 2020, including Asana and BigCommerce, while the individual user count has expanded by a greater rate, 10,000-plus people. More people signed up in March than in all of 2020, Mr. Hartvigsen said. He said Dooly benefited from the pandemic as salespeople affected by budget cuts and travel restrictions flocked to online tools to increase their productivity. “Were we a beneficiary of a really rotten thing for mankind? Yes,” he said.
Other metrics have turned heads among investors. The product’s net promoter score, a measure of user recommendations, is 79, which is high. Its “net revenue retention” or the amount of recurring revenue from existing customers, is well above the norm at 162 per cent, meaning existing customers on average increase their spend on its products by 62 per cent year over year. Customers use Dooly 2.5 to five hours a day on average, Mr. Hartvigsen said.
Spark general partner Will Reed said he became aware of Dooly last year when sales representatives at other companies his firm backs began raving about the product. “We heard it added so much value to their work they’d quit or pay out of pocket if their employer stopped paying for it. That’s something we’ve never heard about a software product before and that speaks to how powerful it is and the return on investment it delivers. The user love is insane.”
Mr. Hartvigsen, previously a sales executive with Vancouver marketing software firm Vision Critical Communications (now called Alida), co-founded Dooly in 2016 with chief technology officer Justin Vaillancourt, fuelled by his disdain for enterprise software he found cumbersome to use. The company is looking to hire at least 60 more people this year.
Dooly’s success has had a bittersweet tinge for Mr. Hartvigsen, 48, whose father died three days after the seed round closed. “I would repay every penny of this money to have him back,” Mr. Hartvigsen said. “I’m gutted he can’t see this.”
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