Entrepreneurs Niji Sabharwal and Jenn Knight had it much easier raising funding recently than during their seed round in June 2020. Then, the AgentSync founders had just showed up in Denver – a city where they’d previously only spent a long weekend – with a loaded-up minivan and a new empty house. Knight, the startups’ CTO, was pregnant. “I knocked on neighbors’ doors to get a WiFi password,” says Sabharwal, its CEO.
The husband-and-wife founder duo had a much easier time with AgentSync’s new Series A funding round, a $25 million round that valued the business at $220 million — up 10x from its valuation just eight months ago. This time, the startup, which tracks insurance broker licensing data for agencies and carriers, raised without needing an updated pitch deck.
As first reported in the Forbes Midas Touch newsletter on Sunday, AgentSync’s new round came together fast, the result of a mix of founder credibility, fast growth, and a popular product. Once at the center of Zenefits’ high-profile regulatory problems in 2015 – licensing cut corners that could’ve benefited from AgentSync — Sabharwal turned to Zenefits’ founder and former CEO, Parker Conrad, for his first check when starting out. It was through Conrad that he met many of the startup’s seed investors, led by Elad Gil and Caffeinated Capital’s Raymond Tonsing in August 2020.
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AgentSync still had 80% of that $4.4 million seed round when, in a strategy session with Gil, the solo investor encouraged Sabharwal to take on more money and move faster. This time, a fellow Denver startup connected them to Operator Collective; another old Zenefits connection, meanwhile, moved in to co-lead the round. PayPal and Yammer veteran David Sacks had invested in Zenefits while it was led by Conrad; in the aftermath of the company’s scandal, he served as interim CEO in the turnaround. Conrad and Sacks are not friends. But both saw the potential for AgentSync’s tools to prevent such situations in the future. Sacks’ VC firm, Craft Ventures, co-led the Series A, with Conrad giving his blessing to Sabharwal. Through Sacks, Salesforce CEO Marc Benioff also personally cut a check.
Reaching a $220 million valuation so fast — Knight, who met Sabharwal at LinkedIn, held a senior role at Stripe until committing to the startup full-time less than a year ago — was only possible due to a combination of factors, including its pace of growth and market size. But Sabharwal points to one other key differentiator that he says entrepreneurs don’t appreciate enough: transparent communication.MORE FOR YOUMeghan Markle Tells Oprah Winfrey ‘It’s Nothing Like What It Looks Like’The Manipulative, Little Known Billionaire Who Nearly Ruined The Country’s Richest Black PersonBy The Numbers: Meet The 30 Under 30 Class Of 2021
AgentSync sends out monthly updates in the first week of each month like clockwork; those updates provide detailed breakdowns of its customer and sales data and spend by department, without opinion. That’s how Sabharwal’s teams operated at LinkedIn and Zenefits, he says; he’s surprised more startups don’t follow suit. “Really good, data-driven updates, that’s been the biggest differentiator for us,” he says.
It helps to have revenue that grew 6x in 2020 and 10x the year before; with 14% of recurring revenue coming from customers expanding their own distribution channels from using the tools, and 9% from a broker recruiting product still in pilot, AgentSync can point to its addressable market growing, too, alongside customer churn its CEO says remains at zero so far. (Even Zenefits’ notoriety has worked to Sabharwal’s advantage, he says, as curiosity about his experiences there has encouraged some customer prospects to take his call.)
But Sabharwal says any entrepreneur can benefit by committing to the data and sharing freely with insiders. “Creating a lot of transparency and visibility means when it comes time for us to say, ‘hey, we want to fund these new R+D initiatives,’ we don’t need to go convince anyone. They know us, they trust us, they see the updates. It’s a quick conversation.”
Self-described “huge nerds,” AgentSync’s founders plan to use the funding to speed up their end goal of tying their past job experiences together with something like a LinkedIn for insurance agents, that can track and maintain compliance credentials wherever they work.
That means AgentSync will be hiring, something else the startup says it does differently. Most of the company’s product and engineering teams — which comprise about 20 of its 50 or so employees — are women, a feat Sabharwal says was only possible by actively recruiting from different pools of candidates and ending a reliance on warm referrals. “It’s incredibly difficult, but it is really important for us as a company to have a bunch of different perspective at the table,” he explains. “We don’t have a dominant group of people, and that makes our decision-making just so much better.”
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