Building a Unicorn and Establishing the Customer Success Category: Nick Mehta, CEO of Gainsight (Part 5)

Nick Mehta: The business went from an unattractive investment from a financial investor’s point of view to a highly attractive one. We are one of those companies that has a lot of long-term potential because we are the main player in the space. I never like to say that we own the category, but so far, we have been the leader.

Vista came to us. They are traditionally a private equity firm but they have become more of a growth equity firm. They went from investing in businesses that were about costs to investing in a high-growth business. They approached us many times over the years. A lot of their portfolio companies use Gainsight. They have this first-hand knowledge of Gainsight.

They approached us and said, “Hey, we would love to work with you.” We were like, “We are too small. We are not ready.” In 2020, we said, “Okay, maybe we will entertain a conversation.” That was in March 2020. The world went on hold for a little bit, so we put our discussion on hold. They reconnected with us in October of 2020. They asked us how our business was. We said, “We did great this year.”

We feel for everyone affected but pandemic-wise, it hasn’t affected us. That was like a litmus test to the company. Because of that, they made an unsolicited offer to become the majority shareholder in Gainsight. We still have a lot of our early shareholders and our employees, but they came in bought the majority of the company. A couple of things happened.

Number one, we got liquidity. Our employees worked so hard for 8 years. It was wonderful as a CEO to be able to do that. They valued the company at $1.1 billion, so it was a great outcome for people. On top of that, it helped us invest in the future. We went back to investing more and increasing our burn a little bit. We hired a ton of people this year. We went from not hiring people for several years to now hiring a lot. We are going to grow from 700 to about 1050 in employees. They wanted to invest to give us some secondary.

The third thing, we think there is an opportunity to build a platform around Gainsight. We have already done the acquisition of a company that helps businesses drive product adoption with technology that runs inside your application. We think that we can do a lot more. Both organically and M&A. We worked with them to give our employees liquidity, to double down on investing in the company, and to do some M&A. 

Sramana Mitra: Are some of the early investors cashed out or are they still in?

Nick Mehta: The earliest investors cashed out because they made so much money. The middle and later investors did a rolling investment. 

Sramana Mitra: Nick, that is a very helpful overview of what you have been up to. Is there anything else that you want to include in this conversation?

Nick Mehta: No. I think this is great. I love what you do. As I close, I just want to say that our story isn’t about Gainsight, it’s about this incredible customer success community and career. That is what gives us energy. To be able to be part of a career is a great honor. 

Sramana Mitra: Very good. I enjoyed listening to you. Thank you for your time.

This segment is part 5 in the series : Building a Unicorn and Establishing the Customer Success Category: Nick Mehta, CEO of Gainsight
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