Entrepreneurship

Cacheflow doubles valuation as it raises $10M, proving the venture market is far from dead • TechCrunch

Cache flowa startup that builds tools for the software sales close process announced this morning that it closed $10 million in new capital.

Cacheflow CEO and co-founder Sarika Garg told TechCrunch that the new capital doubled her company’s valuation, added former lead investor Glenn Solomon ( GGV ) to the board and brought on new investor Crystal Huang ( GV ) as a board observer. Huang led Cacheflow’s latest investment — what Garg described as a seed+ round — for GV, while Solomon put more capital into the round than his pro-rata rights guaranteed, she said.

The venture capital market has slowed and valuations for start-ups of all maturities have fallen. To see Cacheflow raise a year after it came out of stealth and announced a $6 million round caught our attention. How had the company managed to scale quickly at an attractive price when so many startups that once found it easy struggle to replicate it today?

Per Garg, her company became commercially available in April, after which she began receiving incoming notes from investors. The startup CEO said venture investors are still willing to pay for “companies that have momentum or solve a real problem.”

Easier said than done, right? In the case of Cacheflow, after accelerating its sales and marketing efforts a few months ago, it has grown to about a dozen clients, which Garg described as being Series A to C companies. The CEO also said that Cacheflow is talking to major potential customers today, indicating that her company intends to make the default pivot upmarket in the future.

GV’s Crystal Huang, left. Cacheflow’s Sarika Garg, right. Image credit: Cache flow

If the market for software products becomes a bit steeper than before and companies are expected to cut back on new tools especially during the current economic downturn, how does Cacheflow grow fast enough to double its valuation by the end of 2022?

Garg said she learned that potential customers think of Salesforce as a lead management tool for executives. The CRM giant doesn’t map out, she argued, the final tasks of closing a software deal with a customer. This leads to sales managers – think CROs of the world – tracking deals manually. Insert blizzard of email here.

In particular, concerns about clarity and speed of sales in the larger software market are helping Cacheflow sell its own software, as its tool helps sellers track deal-closing progress and who’s reading what.

Remember to original pitch for Cacheflow was that it made buying software easier. Now, when we spoke with the company a few days ago, we noticed a greater emphasis on the sales experience versus the buying process. But both sides of the equation revolve around faster, clearer closing steps for the software buying process. Since everyone who sells software wants it, especially in the current period of economic anxiety, you can see why Cacheflow might be able to withstand a more conservative market.

(If, like myself, you’re not super familiar with using CRM products in the sales process, don’t worry. The software flow for a startup using, say, Gong and Salesforce and Cacheflow would work like this: Gong to record sales calls, Cacheflow to close deals, with both services integrating into Salesforce for records management as I understand it.)

Cacheflow is 16 people today and unsurprisingly hiring after raising more capital. Garg said it’s a good time for startups to stack talent because the market is a bit less chaotic than it was during the go-go-go 2021 era. And, she said, there is less noise in the market. If you bring a software product to market today, your potential customers will be bombarded with fewer calls and ads, which means you may have a clearer view of their attention.

The Cacheflow round is interesting because it’s a startup we’ve seen, and seeing it quickly raise more capital at a significantly higher valuation is eye-opening in the current climate. But also because it looks like well-capitalized startups that are busy selling today might be making it through less of a miasma than we expected, assuming of course that customers actually need what they’re selling.

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