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Read the pitch deck that helped email startup Front raise a $65 million funding round led by Salesforce and Battery Ventures as venture capital markets cool off
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- Email and customer communication startup Front is valued at $1.7 billion after a $65 million round.
- CEO Mathilde Collin says it chose to raise now because valuations are coming back down to Earth.
- Here’s the pitch deck that Front used to show investors that its business is sound.
Customer communication app Front raised a $65 million Series D round that valued the company at $1.7 billion — double the valuation it held when last raising funds in January 2020, CEO Mathilde Collin told Insider.
This latest funding round was led by CRM giant Salesforce’s venture capital arm, alongside Battery Ventures. New investor PagerDuty CEO Jennifer Tejada also participated in the round, alongside existing investors Sequoia Capital, Threshold Ventures and Uncork Capital.
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Front’s last round came just months before the pandemic sparked a huge influx of venture capital interest and cash into collaboration startups, but Collin said that the company purposely decided to sit out that particular gold rush. While many startups saw their valuations skyrocket over the course of the pandemic, those lofty heights also come with increased pressure from investors. Collin says that Front would rather take a slower and steadier approach.
“I chose not to raise in the past two years because I was a bit uncomfortable with how high valuations were,” Collin said.
Front’s product started as a shared inbox that made it easier to collaborate and communicate with colleagues. Its initial product has now expanded to handle both internal company collaboration and customer communication.
Collin said that now felt like the right time to raise because the overall slowdown in startup funding has also brought down valuations to a more comfortable level. After a strong 2021, the company is in a good place to impress investors with its business fundamentals and get a fair, but not excessive, valuation.
“A lot of the decisions we had that we made 18 months ago yielded the right results,” she told Insider. “For example, we decided to go upmarket and that’s led to even better retention. We decided to lean into customer communication and we realized that that allowed us to increase our new business.”
To that point, Collin also found in the process of closing this round that investors now cared more about efficiency than the growth-at-all-costs model that found favor when the market was hotter. She says that investors also spent more time than usual doing due diligence,including speaking directly to Front’s customers.
“They needed more reassurance in a world where everything is changing so quickly and people are trying to figure out how it impacts their business,” she said. “I’ve always been obsessed with efficiency and efficient growth and part of me was happy to see that it was more rewarded in this environment.”
She also hopes the timing of the new valuation and funding will be a selling point when recruiting candidates.
“The thing I feel best about is I think it’s a fair valuation. When you’re raising in this environment and there is so much pressure on getting the right valuation, you can sell candidates on the fact that it is not a valuation that was set a year ago when the parameters were so different,” Collin said.
Front plans to use the new funding to expand its operations in Europe, starting with a newly opened office in Dublin, Ireland. It will also go towards continuing to go after bigger customers, and invest in building the product into a unified hub for customer communications.
Here’s the pitch deck Collin used to convince Salesforce Ventures, Battery Ventures, PagerDuty’s Tejada and others to invest in its Series D round and mint the company as a unicorn:
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