Nashville software startup raises $1.2 million, opens second office in Charlotte
The co-founders say they will triple the size of their team over the next 12 months
It’s been hard for software startups to raise money. Spooked by the stock market and the highest inflation rate in 40 years, investors are tightening their purse strings. VC and angel investment have plummeted 43% year over year according to Pitchbook Data.
Despite the economic turbulence, some startups are still managing to land major investments. Foresight is one of them.
The founders of the Nashville-based sales software told TennBeat they have closed $1.2 million of what they foresee will be a $1.5 seed round. Two Charlotte-based entities — veteran angel investor and fintech entrepreneur Don Rainey and CreativeCo, a fund with a reputation for investing in early stage subscription software companies — are leading the round.
“Foresight is a uniquely compelling and purpose-built solution for a problem that’s always existed,” says Rainey.
Other investors have skin in the game including Joe Maxwell, a well-known Nashville serial entrepreneur and investor. Maxwell led the startup’s pre seed round in 2021.
“It’s been awesome to see what Foresight has accomplished in the past two years and I’m excited to be an angel investor,” says Maxwell. “They’ve got a huge opportunity as companies everywhere are having to figure out how to grow more efficiently in this new economic climate.”
The recent raise comes six months after the startup’s CEO Sagar Shukla headed to his hometown of Charlotte to open a second office. His co-founder, Nigel Hammond remains in Nashville and will continue to grow Foresight’s original office.
“We want to dominate the southeast, and now, Foresight has two founders in two of the fastest growing tech markets,” says Shukla. “It’s the perfect storm.”
Charlotte, which ranked fifth on the Wall Street Journal’s list of top tech markets, is a major finance hub and is ripe with talent from the nearby Triangle Area — Duke, NC State, UNC Chapel Hill.
Shukla and Hammond will put the newly injected capital to work by tripling the size of their four person team, maturing their software and revving up their marketing.
The former DealCloud employees, turned entrepreneurs credit much of the success of their raise to the repositioning of their product.
Launched in 2021, the subscription based software captures and interprets insights about prospective clients. This data provides reps with “foresight” needed to tailor their meetings and pitches to each client.
Ahead of an initial meeting, sales reps create and send value assessments — digital surveys designed to identify “what he or she values.” According to Shukla, 68-percent of assessments sent to prospects are completed.
As soon as the assessment is completed, Foresight auto generates a report visualizing the pain points and opportunities in easy to read charts. Reps then configure those insights into an actionable plans.
“Assessments equal more effective meetings,” says Hammond. “In most meetings, people spend the first 15-20 minutes trying to figure out what matters to the prospect or client. Foresight eliminates that initial dance and empowers sales teams to spend more time talking about what’s relevant to the prospect and answering questions.”
Over the last four quarters, nearly every sector has struggled to close new accounts. According to Forbes, businesses purchased half the amount of new services and products last quarter than they did a year prior. With prospects more hesitant to pull the trigger, enterprise sales teams — businesses with at least $10 million in revenue and 100 employees — have heightened their focus on retaining and upselling existing business.
“Expanding a customer relationship is much more cost effective and typically easier than acquiring a new one,” says Shukla.
According to Forbes, the cost of acquiring a new customer is five to seven times higher than retaining an existing one. Moreover, the success rate of closing a new deal is 5-20%, while upselling an existing account is anywhere from 60-70%.
“To retain and identify untapped opportunities, you’ve got to engage” says Hammond. “Here’s the problem: Historically, there hasn’t been a great vehicle to do that. It’s not practical for people to have meetings all the time. Plus, notes from zoom or in-person meetings aren’t measurable feedback. “
Hammond and Shukla realized Foresight’s value assessment was the answer.
“Companies can engage existing customers efficiently and effectively with Foresight,” says Shukla.
Instead of asking for an hour of a client's time each month for a “temperature check”, he or she can provide feedback by answering a 3-5 minute value assessment. Color-coated graphs make it easy for account managers to interpret individual client responses and for teams to track trends across all accounts.
“90% of assessments sent to existing customers are completed,” says Hammond.
Shukla proudly tells TennBeat they’ve seen the strategy work at scale.
“In less than 2 months, we helped a publicly traded company protect $4.5 million in recurring revenue, generate $75,000 in upsells, and prevent $50,000 in churn,” says Shukla.” He declined to disclose the name of the company.
“It’s fantastic to see they’ve generated strong outcomes for clients in the short time they’ve been around,” says Rainey.
“Almost every industry is using data to make decisions,” says Hammond. “With Foresight we are empowering salespeople to harness the power of data to understand their buyer and existing customers.”
Thanks for reading tennbeat! Subscribe for free to read more Nashville business news.