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Demostack, a San Francisco, California-based startup creating a "demo experience" platform for software-as-a-service (SaaS) sales teams, today announced that it raised $34 million in a Series B round led by Tiger Global Management with participation from Bessemer Venture Partners, Amiti Ventures, GTMfund, Operator Collective, and StepStone. CEO Jonathan Friedman says that the proceeds will be put toward growing the company's footprint while investing in R&D, sales and marketing across the U.S. and Europe, Middle East and Africa.
With the average employee using at least eight SaaS apps costing $2,884 in subscriptions per month, it's becoming tougher to compete for enterprise 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 between 20% and 50% for most business-to-business SaaS companies, higher than the typical close rate range in the software industry (about 26% to 30%).
Friedman founded Demostack in 2020 alongside Aaron Hakim and Gilad Avidan. Friedman, who served as a head of product strategy 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 to found Reactful, while Avidan was a lead researcher at Cellebrite -- the company that reportedly worked with the FBI to unlock the San Bernardino iPhone -- before cofounding online newsletter startup Smore.
Friedman says he got the idea for Demostack while he was at TripActions, overseeing their Liquid product for expense management. He realized that the Liquid R&D team was busy developing the live product, but sales needed a version of the product built for showcasing.
Image Credits: Demostack
"I set out to find out how other companies were solving for 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 for your deal."
Demostack's isn't a groundbreaking proposition. Reprise offers a similar platform where software companies can create product demonstrations and tours. So does Walnut, which offers a service that lets sales teams create tailored demos that highlight specific application features.
But Friedman asserts that Demostack does it better. Using a tool, customers can clone their product into a demo environment and edit elements of the demo with a no-code, drag-and-drop editor. (Demo assets are built off of a single source of truth, so that they can be updated with each new product release.) The demo can be customized to a buyer's use case or vertical and shared via the web, in a live demo, or in a "leave-behind" after a sales call.
"[We've] created something truly unique for the market -- the ability to create tailored product demos for every live sales call in minutes," Friedman said. "Demostack lets you showcase your product in the best light on every call, without the hassle."
Questions of novelty aside, Demostack has had no trouble attracting customers -- or securing funding -- to date. The 93-person company has dozens of customers including BlueVoyant, Hopin, Wix, Ironclad and Gusto and has raised a total of $51.5 million in venture capital.
"We're positioning ourselves as the category leader of demo experience solutions for mid-market and enterprise organizations," Friedman continued.