Successful Pivot to a High Growth Business: Ray Grainger, CEO of Mavenlink (Part 7)

Sramana Mitra: The money that you had in the convertible note and your own money, that was financing 2010 then?

Ray Grainger: It got us through 2010. It actually got us almost through 2011 as well.

Sramana Mitra: In 2011, you generated revenue?

Ray Grainger: Yes. We got up to a million dollars in 2011.

Sramana Mitra: What happens in 2012?

Ray Grainger: Probably a similar track. We grew at over 100% year over year.

Sramana Mitra: You never went back to the marketplace matchmaking and all that stuff. You basically stayed with catering to the service provider model.

Ray Grainger: That’s correct. We formulate who we’re going to do this for. It’s still part of our vision. It’s very much a part of the name and connecting talented individuals. What we recognized was that there was just a lot of foundational stuff in order to mimic these higher-level trusted engagements that were required to find people.

We ended up getting a patent about a year and half ago for what I would refer to as LinkedIn for professional services. You find people who you know who have already worked at Mavenlink. The requirement is that you have lots of firms and lots of paying customers across the globe and lots of different business types. We would allow them to opt in and engage to expand their network. We prototype all of that. We did get the patent. We will most likely end up launching in the next couple of years. That will be the capstone release of our company’s journey.

Sramana Mitra: Between that angel convertible not financing and now, has there been any other financing or have you been organically growing the company?

Ray Grainger: We’ve raised a lot of capital to help us grow at the pace that I mentioned. We’ve raised about $40 million.

Sramana Mitra: When did you raise your Series A?

Ray Grainger: We raised Series A at the very end of 2011. It was a small raise of about $4 million that we did through our own private network. The company had shown traction that attracted high net worth individuals that we were able to connect with. We did the same thing on our Series B – about $3.5 million more or less on the same individuals. Then another round a year after that with the same group.

Sramana Mitra: When you raised Series A, what was you revenue level? When you raised Series B, what was you revenue level?

Ray Grainger: I’d prefer to keep that private. We were able to more than double the revenue which then gave us a corresponding similar multiple in our valuations.

Sramana Mitra: Series A and Series B were all with sustained significant growth. What is Series C? Is that an institutional round?

Ray Grainger: Series C goes back to leveraging networks and how important it is for entrepreneurs, over their careers, to really develop strong business relationships. Our investor in Series C was with Carrick Capital. One of the founding Managing Directors there is a fellow named Jim Madden. Jim Madden interviewed me on campus from Accenture.

We never worked together in the firm. He was in Life Sciences. I was in Hi-Tech. He had a great entrepreneurial career himself. He ended up creating companies, taking them public, and became an investor. He created another company called Carrick in private equity. Though we were at an earlier stage than they would typically invest in, they believed in the idea. They helped us raise our Series C round which was approximately $10 million.

Sramana Mitra: Was there any other round?

Ray Grainger: Yes, they came in for Series C Prime which was a year Series C. That was a $20 million round.

Sramana Mitra: When was that last round of financing?

Ray Grainger: January of 2015.

Sramana Mitra: Whom do you consider as competitors?

Ray Grainger: They typically compare us to multiple providers to do what Mavenlink does in a single application. In a mid-market company, they would compare us to Workfront and NetSuite’s OpenAir. Then they would have Tableau and they would be using SharePoint for document repository. Mavenlink would be the other competitor against all four of those.

Sramana Mitra: Give me some idea about where you are right now; whatever metric you are comfortable sharing.

Ray Grainger: Employee-wise, we are closing in on 160. I expect us, at the end of the year, to end up right around 220 employees. Our revenue will grow in excess of 130% this year. We’re very confident about that. We would do between $20 million and $40 million in sales.

Sramana Mitra: How many customers are we talking now?

Ray Grainger: As far as customers go, over 4,000 businesses are paying customers. Those customers can range from a couple of people in their company all the way to very large companies like Genpact. Genpact runs all of their consulting services on Mavenlink. The product has gotten to a point where it’s really a product and service for every size services company now.

Sramana Mitra: Your sweet spot is becoming very different from where you started?

Ray Grainger: That’s correct. We just migrated to where the market was pulling us.

Sramana Mitra: Congratulations! It was very nice talking to you.

This segment is part 7 in the series : Successful Pivot to a High Growth Business: Ray Grainger, CEO of Mavenlink
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