1Mby1M Incubation Radar 2020: Gather Voices, Chicago, IL

Video is the most important type of content, and yet it remains complex for business. Gather Voices is a B2B SaaS company that makes video simple for businesses and organizations around the world.

Gather Voices was founded by Michael Hoffman who has been working with businesses on engagement strategies for 15 years with a focus on video content. Michael has also taught marketing at the University of Chicago. In 2005, he founded See3, a digital marketing agency that specializes in video production. Michael’s agency clients increasingly pleaded with him to help them create more video content at faster speed and lower prices.

The idea for Gather Voices came in 2015, when the first feature film shot on an iPhone was released. Hoffman understood that with the with wide availability of professional video cameras, there was a unique opportunity to change the video creation experience. Michael brought in Joel Resnik as a co-founder. Joel has grown two companies to over $50mm in revenue, including the video game business at RedBox.

Using Gather Voices, the admin creates a “Request for Video” where they set talking points, a time limit, and branding. This request can be sent to someone in an email or a text message, embedded into a form or web page, or shared on social media. When clicked, the end-users are then walked through making the video the company wants, on their own device. Here is a short video created for its trade and professional association clients. And here’s a sample of what a request looks like to an end user.

The software improves video quality through checks of lighting and sound, has the user transfer the rights to the content to the company, and sends the video right back to the company where it can be captioned, edited, branded, and published in a few clicks. Gather Voices is being used by organizations around the world to gather and distribute video from their customers, employees, members, stakeholders, fans, and donors.

Most of the products in the market are sold as video tools with a narrow focus (such as customer testimonials) at consumer price points. Some of the tools in the video space that share some functionality with Gather Voices include VideoAsk, Cinebody, and StoryTap. Gather Voices has the opportunity to build the Video Operating System category in the same way that Hubspot created Inbound Marketing, Gainsight created the Customer Success market and Drift created Conversational Marketing.

Gather Voices is an end-to-end solution, not a tool. It is a seamless, full-service software for video content marketing and internal communications. Its focus is on engagement with video, not video tools. Its main value proposition is engagement, with prescriptive playbooks and plug and play software that embeds into the existing workflows they already have spent time creating.

The current top segment is trade and professional associations with annual budget between $5-$50M, with a significant social media presence and events that are critical engagement and revenue drivers for the organization. Its beachhead in the trade and professional association space has a serviceable market of 7,000 companies. At its $20,000 target price, it targets $140M in revenue just in its beachhead.

For its middle market customers, it sells subscriptions that range from $18,000-$24,000 per year. Its subscriptions are priced at $12,000 for organizations with less than $5M in revenue. It has launched a plugin to a popular software and is selling this closed loop, limited functionality product for $490/month with the potential to upsell a substantial number of those customers to its full platform.

Gather Voices is building a leveraged sales model through the associations to gain access to new verticals. A single association in a single vertical, such as HIMMS in healthcare, has 80,000 members, representing over 10,000 organizations that are opportunities for Gather Voices. This $200M TAM is similar in CPG, Facilities Management/Real Estate, Automotive and Travel and Hospitality.

In addition, it is strategically integrating with existing software providers that service specific verticals as well as specific roles and become both a revenue and a lead generation opportunity. Its leveraged sales model means that it can farm leads without the need for paid advertising, and with limited amounts of conference and organizational sponsorships.

As it expands in verticals, Gather Voices also continues to expand horizontally through marketing positions and into enterprise sales, where it estimates 1,000 customers at $150,000 AOV, for a $150M market.

Gather Voices has 60 customers, including White & Case, Emergency Nurses Association, ActBlue International Facilities Management Association, St. Jude Children’s Research Hospital, Children’s National Medical Center, Rush University Medical Center, and Retail Solutions Provider Association. It has grown its customer base by 50% in 2019 and platform usage has grown over 200%.

Gather Voices currently has $72,000 in MRR and has grown 9% MOM on average in the past three months. It is building on its leveraged sales model with a combination of targeted outbound and content marketing. It has currently prioritized growth over profitability but has strong unit economics with an LTV/CAC ratio >3. About 80% of its customers pay their annual subscription upfront, making it cash efficient.

The company has raised a total of $1.8M over three tranches in 2018, 2019, and early 2020. All of the funds are in convertible notes with a $6M cap and a 20% discount. In addition, Jason Calacanis invested $100,000 at a $1.6M cap. Its lead investor in the last tranche of funds was New Stack Ventures of Chicago.

Gather Voices plans to raise $6M in its next round of funding in late 2020. These funds will give it 24 months of runway and $11M in ARR, with the option for profitability. Its ideal investors are tier-1 VCs that invest in B2B SaaS and the future of work.

It has developed a growth strategy that provides off ramps at each step along the journey. As it gets significant traction in a specific vertical, software companies and PE investors in those verticals take notice. Three major providers of event software have shown interest in partnerships, which could lead to M&A.

The company is working on integrating its software into the ecosystems of public software companies that include Microsoft and Salesforce, but also more niche public companies such as Blackbaud. Foundational technology for the scaling of video inside the enterprise will be interesting to these companies, as well as companies such as Adobe and Oracle that have invested in building a comprehensive marketing cloud.

This segment is a part in the series : 1Mby1M Incubation Radar 2020