Why is HubSpot acquiring Clearbit?
What's happening in the SaaS world?
Welcome to the 193rd edition of the GrowthX Newsletter. Every Tuesday & Thursday I write a piece on startups & business growth. Today’s piece is going to 94,400+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more
Onto today’s issue 👇🏻
Yesterday, HubSpot, a $2 billion revenue giant, acquired Clearbit. This isn't a unique event & 2024 will bring more eventful announcements. Here's what's unfolding for global SaaS companies👇🏼
Let's get our basics right
Hubspot is a CRM - Customer Relationship Management tool. It's a marketing + sales software that helps companies
→ Attract website visitors
→ Convert leads
→ & close customers
It’s a Dhanda tool. Go one layer deep, and you will understand - there is nothing unique about HubSpot. A lot of their competitors do the same thing at arguably low cost.
So why companies buy HubSpot? 🤔
You see - CRM tools have one job - generate insights about potential customers & help them generate revenue. The better the CRM tool is at these insights, the odds of winning the customer go up massively.
For HubSpot → pull potential customer data from various sources and combine it into a beautiful, simple, customer record. This includes sources like —
Marketing emails
Sales calls
Support tickets
Website interactions
This is arguably the biggest advantage of HubSpot. But, there’s more data out there that can make this "getting good at potential customer insights" even solid. So, you must be thinking - what is this data?
Let's take an example 👇🏻
Imagine you work at MoEngage. You want to win a deal with Razorpay. A VP of marketing at Razorpay came to Moengage's website and filled out a lead form. But, the VP also went to CleverTap's website.
Now, with HubSpot - Moengage can understand everything about this VP's interaction on Moengage's website, did this person applied for a demo, and so on.
But the crucial data here to close this deal is - this VP is comparing CleverTap vs Moengage. This means if you are a Sales Director at Moengage, you will need to know this before you go on the first demo call with Razorpay.
This is exactly the kind of data Clearbit has.
Don't ask me how they get this data - it's a gray area ;)
Now, if Clearbit sits inside HubSpot, any customer of HubSpot will have all the data about a lead not just from their website but also from the competition's websites. That's mind-bending, to be honest.
Directionally, this acquisition makes sense, right?
Now, we can sit and debate the price. A revenue multiple of 50X for the Figma acquisition & 20X for Loom points to a potential price point of > $1 Billion for Clearbit. But, we will wait for the formal numbers next week.
What's happening in the SaaS world? 🥹
"Consolidation". Think of it this way - when the market was bullish, everyone had access to so much capital to build companies that mergers and acquisitions made no sense. But, as times have changed, growing SaaS revenue has become extremely hard. Days of "good to have" SaaS are over.
Value {ClearBit + Hubspot} > Value {Hubspot} or {Clearbit}
Hubspot gets to upsell & Clearbit gets Hubspot distribution.
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