AI Startup Clari Secures $35 Million Funding Round

Clari, a startup whose founders have a track record solving complex problems with machine learning, said Wednesday it had raised $35 million in a financing round that wildly exceeded its initial Series C goals.

The company based in Sunnyvale, Calif., had set out to raise $20 million. But offers kept coming from investors that saw the potential of the technology that infuses artificial intelligence into the sales process, said Andy Byrne, the company's founder and CEO.

Clari's offering sits on top of Salesforce and Microsoft Dynamics, adding a layer of intelligence to those CRM systems that delivers predictive and prescriptive insight to sales reps, he said.

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Byrne and his partners had cut their teeth in the machine-learning space with Clearwell Systems, a natural language processing company that leveraged the technology to facilitate the e-discovery process for litigation and securities investigations. Symantec bought that company in 2011 for $390 million.

After a stint working at the security giant, the core team, including Clearwell CTO Venkat Rangan, got restless and reformed in 2013 for a new venture, Byrne said.

"We thought machine learning was going to do something significant in enterprise software," he said, and "we thought we would start in sales" because the team intimately knew the pain points of that market.

They went back to Sequoia Capital, the investor behind their previous venture, and pitched continuing the machine-learning journey into "a much larger space, the CRM space," Byrne said.

The company is "starting in sales, but we're not stopping there," Byrne added.

The latest round was led by new investor Tenaya Capital.

Last year, Clari tripled its customer base, accumulating an impressive roster of high-profile logos like GE, Nutanix, Audi, Adobe, Airbus, Frontier Communications and Symantec.

With success selling to large enterprise technology companies, the company started branching out into manufacturing, health care, life sciences and transportation.

All those Clari customers had "a CRM data-quality issue, pipeline issues, forecasting issues, rep productivity issues," he said.

While they spent a lot on CRM and business intelligence products, those problems weren't solved by "solutions that were looking in the rearview mirror, rather than predicting the future," Byrne said.

Clari analyzes sales data going back two years, then incorporates more data from Office 365, Gmail Exchange, file sharing services and calendars.

"That's a powerful set of signals we're harvesting," he said, and the company is improving the efficacy of its AI by adding "signals" through integrations with vendors like DocuSign, Xactly and ClearSlide.

The platform compares deals, looks at sales histories, reveals risks, and recommends actions to help reps be more productive and close deals faster.

There's a unique interface for three types of constituents: sales reps, managers and executives. All those use cases fall into the category the company calls "Opportunity-to-Close," he said.

Customers, instead of logging into Salesforce or Dynamics, log into Clari to access their CRM systems.

Typical Clari channel partners already have Salesforce and Dynamics practices. The solution could expand in the next year or two to incorporate SAP Hybris as well, Bryne said.

"There is a mad rush in the CRM ecosystem to go from CRM expertise to AI expertise," Byrne said.

Partners want to evolve from being resellers and systems integrators with CRM practices to helping customers implement machine-learning technology and best practices to enable anticipatory insight.

Grant Wilson, CEO of Force Management, a sales consultancy based in Charlotte, N.C., is leveraging Clari to teach customers, most of them running Salesforce, how to drive more revenue per each agent on staff.

"With the AI capability, we can look at some of these trends," he said, and predict what upcoming quarters will look like.

Clari facilitates conversations about methodology, reinforcing core tenets and facilitating the coaching process.

"I can actually see some things that I couldn't see before, and I can coach in a much more constructive way," Wilson said.

Clari's value proposition is that the technology components, specifically the AI, are delivered as a comprehensive solution, he said.

And it's a two-way street, with Clari incorporating into its technology feedback from Force Management stemming from its expertise and experience with customers.

Clari has been developing with a rapid pace of innovation, and every update thus far has introduced a substantial set of new capabilities. Wilson said he hopes to see the latest funding go to scaling its market reach.