Cache streama startup that builds tools for closing software sales announced this morning that it has closed $10 million in new capital.
Cacheflow CEO and co-founder Sarika Garg londonbusinessblog.com told londonbusinessblog.com that the new capital doubled its company’s valuation, added former lead investor Glenn Solomon (GGV) to the board and brought in new investor Crystal Huang (GV) as a board observer. Huang led Cacheflow’s latest investment — what Garg described as a seed+ round — for GV, while Solomon put more capital into the round than his pro-rata rights guaranteed, she said.
The venture capital market has slowed and valuations for startups of all maturities have fallen. To see Cacheflow increase a year after it came out of stealth and announced a $6 million round caught our attention. How had the company managed to pull off a quick raise at an attractive price when so many startups that once found it easy struggle to repeat it today?
Per Garg launched her business in April, after which she began receiving incoming banknotes from investors. The startup CEO said venture investors are still willing to pay for “companies that have momentum or solve a real problem.”
Easier said than done, yes? In the case of Cacheflow, after ramping up its sales and marketing efforts a few months ago, it has grown to about a dozen customers, which Garg described as Series A through C companies. The CEO also said that Cacheflow is in talks with larger potential customers today, indicating that her company plans to make the standard more expensive in the future.
If the software product market steepens somewhat than before, and companies are expected to cut back on new tooling, particularly during the current economic downturn, how will Cacheflow grow fast enough to double its valuation by the end of 2022?
Garg said she found that prospects see Salesforce as a lead management tool for managers. The CRM giant, she argued, doesn’t map out the last-mile tasks of closing a software deal with a customer. This leads sales managers — think the world’s CROs — to track deals manually. Insert a blizzard of email here.
In particular, concerns about the clarity and speed of sales in the larger software market are helping Cacheflow, well, sell its own software, as the tool helps sellers track the progress of closing deals and who reads what.
Recall that the original pitch for Cacheflow was about making software buying easier. When we spoke to the company a few days ago, we noticed that there was more emphasis on the sales experience than the buying process. But both sides of the equation revolve around faster, clearer closing steps for the software purchase process. Since everyone selling software wants to, especially in the current period of economic anxiety, you can see why Cacheflow might be able to beat a more conservative market.
(Don’t worry if, like me, you’re not very familiar with using CRM products in the sales process. The software flow for a startup using Gong and Salesforce and Cacheflow, for example, would work something like this: Gong to record sales calls to take, Cacheflow to close deals, integrating both services into Salesforce for records management, as I understand it.)
Cacheflow consists of 16 people today and unsurprisingly hires people after they raise more capital. Garg said it’s a good time for startups to stack talent because the market is a little less chaotic than it was during the go-go-go 2021 era. And, she said, there is less noise in the market. If you bring a software product to market today, your prospects will be bombarded with fewer calls and advertisements, which means you might get a clearer run for their attention.
The Cacheflow round is interesting because it’s a startup we’ve been eyeing, and in the current climate it’s striking to see it raising more capital quickly at a much higher valuation. But also because it seems that well-capitalized startups that are in the business of selling today may be experiencing less miasma than we expected, provided, of course, that customers really need what they’re selling.