Today, Next Coast Ventures is proud to announce that we have led the $12.5M Series C round in Austin-based TrustRadius, an enterprise software review platform. This is a big moment for us and for the Austin ecosystem. TrustRadius’ Series B was led by Austin-based LiveOak Ventures, who will be returning in this round alongside Mayfield Fund.
Vinay Bhagat, TrustRadius’ co-founder and CEO, and his team have built an incredible product by focusing on quality and the customer experience. We are always first and foremost looking for the very best entrepreneurs building disruptive businesses in Next Coast markets, and Vinay and his team couldn't fit the bill any better.
At least half of the TrustRadius team – including the founders – have worked at companies we’ve been investors in or served on their board before. Our co-founder Thomas Ball has worked with Vinay and TrustRadius co-founder Scott Miller for over a decade. He served on Vinay’s board at Convio, which resulted in an IPO, and he’ll be joining TrustRadius’ board as part of this investment. We’ve been following TrustRadius’ progress since we started NCV in 2015 and are thrilled to have the chance to officially partner with them during this new phase of growth.
So what exactly does TrustRadius do?
TrustRadius is the most trusted platform for software and technology reviews with high-quality, in-depth reviews across thousands of products. The reviews are written solely by verified contributors and average 5x longer than other industry platforms. They’re optimized for complex purchase decisions and focus on describing use cases, clarifying product differences and providing comprehensive discussions on pros and cons of the software. Outlining the cons are critical: 71% of buyers say knowing the cons of a software are vitally important and that sharing them is the #1 thing a vendor can do to speed up the sales cycle.
Why are the need for in-depth and verified reviews so important? 56% of B2B buyers use reviews as a key resource before making a purchase decision and 67% of consumers reported reading four or more online reviews to determine whether or not they can trust a business. Additionally, only 11% of buyers say vendor reps are trustworthy, and only 19% find vendor marketing useful (for scale, 18% of Americans believe in Bigfoot). So trusted reviews have become an extremely effective gatekeeper for any software looking to gain market share.
The enterprise software business is also massive: it’s worth nearly half a trillion dollars worldwide. Each industry vertical has a long list of providers to choose from, making competition fierce and differentiation difficult. TrustRadius is at the center of it, cutting through the noise and providing customers with best-in-class content to empower them to make fully-informed purchase decisions. Nearly half of the traffic on their platform is from enterprise users with more than 1,000 employees and many of them have formally integrated TrustRadius’ platform into their sales and marketing processes.
And they are really stepping on the gas: The company currently has 59 employees in its Austin headquarters and plans to double that in the next year. Our co-founder Michael Smerklo scaled his own B2B-focused company ServiceSource from 35 employees all the way to IPO, so he has highly-relevant perspective of how to put in place the sales infrastructure and scaling model for a B2B-focused product. He’s been incredibly impressed with their progress and is really looking forward to continuing to work with the team as they ramp up their growth.
The investment opportunity was also right in the intersection of two of our investment themes: a full-stack business model and software version 3.0. We believe that full-stack business models have the ability to radically improve the customer experience and TrustRadius’ platform is a prime example of that. In addition to providing reviews, the platform also has cutting-edge industry research and competitive analysis, as well as significant marketing and sales benefits for software providers. We also believe that this proliferation of enterprise software has led to completely new dynamic between the buyers and sellers in the marketplace. TrustRadius is right at the center of this changing dynamic, providing the highest quality content and constantly adapting its platform to the rapidly-changing enterprise software market.
But, most importantly to us and our founding mission, this opportunity was a great fit for our ‘built by entrepreneurs, for entrepreneurs’ motto. We look to find the very best entrepreneurs who are building disruptive business in huge markets and try and help them in any way we can. Vinay truly fits the model of one of the most innovative entrepreneurs in the market and a true pioneer of the Austin entrepreneurial ecosystem. He and his team have worked tirelessly to build a great company the old-fashioned way: by maniacal focus on the customer experience. At Next Coast, we look to help our entrepreneurs just like this with every tool at our disposal – and we are proud to have been selected to partner with Vinay and the TrustRadius team for the next phase of their journey.