Demostack, a San Francisco, California-based startup creating a “demo experience” platform for software-as-a-service (SaaS) sales teams, announced today that it has raised $34 million in a Series B round led by Tiger. Global Management with the participation of Bessemer Venture Partners, Amiti Ventures, GTMfund, Operator Collective and StepStone. CEO Jonathan Friedman says the proceeds will go towards growing the company’s footprint while investing in R&D, sales and marketing in the US and Europe, the Middle East and Africa.
Since the average employee uses at least eight SaaS apps costing $2,884 in subscriptions per month, it becomes more difficult to compete for the company’s IT dollars. Standing out is key, and demos are among the most powerful tools in a sales team’s arsenal. A survey by Matrix Partners General Partner David Skok found that demo close rates range from 20% to 50% for most business-to-business SaaS companies, higher than the range of typical close rate in the software industry (about 26% to 30%). .
Friedman founded Demostack in 2020 along with Aaron Hakim and Gilad Avidan. Friedman, who served as chief product strategist at TripActions for two years, is a founding employee of Reactful, which leverages machine learning to detect visitor behavior and intent on websites. Hakim also helped found Reactful, while Avidan was a lead investigator at Cellebrite, the company that allegedly worked with the FBI to unlock the San. Bernardino iPhone: Before co-founding online newsletter startup Smore.
Friedman says he got the idea for Demostack while he was at TripActions, overseeing its Liquid expense management product. He realized that Liquid’s R&D team was busy developing the live product, but sales needed a version of the product built for display.
“I set out to find out how other companies were solving this demo environment conundrum, but no one seemed to have a good solution,” Friedman told TechCrunch via email. “The demo is the proof behind your proposition, and getting it right is crucial to your deal.”
Demostack’s is not an innovative proposal. Reprise offers a similar platform on which software companies can create product demos and walkthroughs. The same goes for Walnut, which offers a service that allows sales teams to create custom demos that highlight specific features of the app.
But Friedman says Demostack does it better. With one tool, customers can clone their product in a demo environment and edit demo elements with a no-code, drag-and-drop editor. (Demo assets are built from a single source of information, so they can be updated with each new product release.) in a “leave behind” after a sales call.
“[We’ve] created something truly unique to the market: the ability to create custom product demos for every live sales call in minutes,” said Friedman. “Demostack allows you to best showcase your product on every call, without the hassle.”
Issues of novelty aside, Demostack has had no trouble attracting customers, or securing funding, to date. The 93-person company has dozens of clients, including BlueVoyant, Hopin, Wix, Ironclad and Gusto, and has raised a total of $51.5 million in venture capital.
“We are positioning ourselves as the category leader for demo experience solutions for enterprise and mid-market organizations,” continued Friedman.