How Gong Tripled Its Valuation to $2.2B With 150% Net Revenue Retention

You guys are gonna wanna

send this one to your parents. Imagine being 56 years old with two kids and launching a multibillion dollar company. That's exactly what Amit Bendov did when he launched Gong back in 2015. The business hit 5,000,000 revenue in 2018 before breaking 100,000,000 in 2022. And here in 2024, they've got a real shot at breaking $200,000,000 of revenue. Now what about equity? How much of the company does Amit still own? Well, the firm sold 9% equity or about

nine percent in its 65,000,000 series C in 2019. And that valuation shot up during the equity heydays of 2021 and 2022, where they closed and hit a $7,300,000,000 valuation. Again, likely to be down now because of contracted equity markets. Now, three things you should know about Gong. Only 90 new trials per month come from their content marketing. That's not a lot of trials for a company that's so big. Secondly, they don't need a lot of customers

because they pay 6 figures and those customers naturally expand with 150% net dollar retention each year. Lastly, Amit broke 1,500 customers in 2021, expected to be over 2,000 this year. Now how did Amit build a billion dollar company while also being a father of two? This is one of those you guys wanna send to your parents. Encourage them to launch a company. Let's jump in here and learn from Amit. Hey, folks. If we haven't met yet,

my name is Nathan Latka. I launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies. Thank you so much for that. After the book, I launched this show and went on to create founderpath.com. I raised a large fund to do non dilutive deals with B2B software founders. So far, we've invested in over 400 software founders

totaling $150,000,000. Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go sign up at founderpath.com for free to get your offer. Alright. Let's jump into the interview.

Hello, everyone. My guest today is Amit Bendov. He's the cofounder and CEO of gong.io, the number one revenue intelligence platform for sales. He brings more than twenty years of leadership experience and hypergrowth enterprise software startups, managing product marketing and sales for global corporations. Prior to founding Gong. He was the CEO of Sisense and CMO of Panaya. Amit, ready to take us to the top?

Yeah. Let's give it a shot.

So you're very specific there in calling Gong a revenue intelligence platform for sales. Help me understand what that means.

Yeah, so revenue intelligence is kind of a new thing, the majority of the world still doesn't know what it is, but over like a thousand companies already do.

It's a new paradigm for managing customer facing organizations rather than relying on information that salespeople and customer support people manually type into their CRM system or support systems, Gong automatically captures information from the customer's mouth by reading their emails, by joining calls, by joining meetings, using Metrolinx to understand to compile that information, creating insights both for the

customer facing people, how they can get better and for the leadership team so they can understand exactly what's going on without having to chase people to update the forms.

This is obviously something that people are using not only just like they were pre COVID, but reading some of the press that you put out during COVID, sounds like you significantly increased revenue during COVID. I want to dive into that, but on the back end of that you just did another funding round I believe. So help us understand what's the structure like today, how have funded the company?

So the most recent round is the Series D $200,000,000 led by CodeTwo, Thrive, Salesforce, and Emits. This is the fourth round, so total to date is almost $340,000,000 The last round was led by Sequoia in December, dollars 65,000,000.

And the valuation on this most recent round was what?

It was close to $2,200,000,000

And what was it back in December?

It was close to $7.50, so 3x.

Yes, so I asked that very specifically, right, because now I want to dive into that. How on earth do you essentially add $1,500,000,000 in enterprise value over a six month period when the world is also shutting down?

There's a number of reasons for that. So we always grew like very fast, we almost like tripled the valuation about the same time, the last round was a significant multiplier, so this is a good news. We're not growing just because of COVID, we did pretty well before that and I think we've done well regardless, but there are a few reasons. First, it does give us some tailwinds,

and second, the potential for Gong is so infinite that now more and more people in the investment community start to recognize this. So you're looking at something like massive market potential,

very nice execution and traction, seems to be faring well with the new normal, right? And there aren't a lot of investment opportunities, a lot of liquidity, and so there you have it.

Walk me through how you're getting customers. You launched the company, I believe, back in 2015, 2016. Correct?

Yes. And

when you last came on the show in February 2018, you shared you were serving about 200 customers. How many customers are you serving today, and then break down how you're acquiring them?

Now we're approaching like 1,500, maybe a little less,

and we're talking it's mostly direct,

so we haven't even started developing like channels and partners, it's either like outbound calls, we've got a good amount of inbounds, a lot of referrals and word-of-mouth, people got sales as I think about 15 to 20% annual attrition, but actually that's worked well for us because if I use Gong at my current company and I'm leaving another, odds are we'll get a new lead, so

that organic growth in ops has been pretty good for us.

You know, I don't obviously pay for the product. I'm not a big enterprise, but when I do get a sneak peek at the product UI, I see GIFs where there's like two call recordings with highlighted sections between top performing rep that kills quota and one that misses, and you'll see like the one that hits quota, you'll say, hey, they use words like your and you will and the one that doesn't hit never uses the word you

or your or if you pay us, you will get x. This is obviously a unique insight. Now, do other sort of platforms in your space do that or is that unique to Gong?

I mean, we're not the first to do that. So first there are like in contact centers, there are like technology in something like similar, it's pretty far, but I mean just the idea of identifying which word people are saying that we did not invent that. There are some other platforms that do some of that like even Zoom has some transcription capabilities definitely the CRM has some lightweight capabilities, so it'll allow you to

identify what people are saying, but not to my knowledge anything that compiles in terms of actionable insights that you could actually use to improve. That we're... Right now we're kind of like alone, you know, I'd probably not stay like that forever.

Help me understand adoption inside these 1,500 customers. How many total reps are using the platform across this paid customer base?

Think it's something to the tune of 60,000, tens of thousands for sure. The adoption is fantastic and Gong is also unique in something like... Almost bizarre. Our Net Promoter Score is 72, which for people that don't know what it is, Net Promoter Scores would be minus 100 to plus 100 and

the iPhone when it was launched was at 66. That's probably the most successful consumer product that you could think of. Gong is rated higher, which is an anomaly for an enterprise software product. Usually it's not something people get so excited, but it is like a consumer level excitement and that helps drive the growth.

Is that NPS score Amit transitioning over to really, really strong net revenue retention numbers annually?

Yeah, so our NDR is almost always like these days north of like 150% and...

115 or 150?

150, that's like it's best in class. Mean we have several tiers of customers, it varies obviously, the large customer could do more, the small customer could do less, but I mean fantastic retention numbers.

Yeah, I mean, just so people can have context around that, when you look at publicly traded SaaS companies, the average NDR net revenue retention is usually around 115%, 120%, so yes, 150 net revenue retention is really incredible. Now, I imagine you probably see sort of power laws on your base where you might take one account that's paying you 1,000,000 per year and double it to 2,000,000, so there's 200% growth in one account, and obviously that juices those numbers, right?

Yeah, yeah, but that's not an anomaly. We started to get more and more of these, that's fair game.

Paint the picture of the million dollar account, how many reps does that team probably have on you and what's their usage look like?

I mean, not getting too specific, but definitely like thousands of people. So we have some large customers who like global deployments of thousands of people, and that can get them definitely to the 7 figures.

When you peel back the 150% net revenue retention and you look at gross revenue churn before you add back expansion, what are you seeing on a gross revenue churn basis annually?

With the larger customers it's like close to zero, mean occasionally you do get some but these are like very stable and it can be a little higher on the SMB side of the small businesses. For example right now, even like COVID, overall we're doing pretty well but there are obviously customers who are like hurt badly by the situation they are in the hospitality industry or restaurant industry, but in most accounts it's very low.

So with that sort of understanding, obviously the growth has also been impressive in terms of valuation, also customer growth over the past two or three years, help me understand how your team has changed over that time period. So you to me had 50, just 52 folks on the team back in early twenty eighteen, what are you at today?

Close to 300, I think three thirty, it changes by the day, so yeah about three thirty people. We have been like pretty cash efficient largely because of the product strength and which drives strong unit economics. So we haven't even touched, we're still running on a Series B money, right? We raised the Series B, we did not start touching the Series C money we

raised in December, and we still have a pretty long way to go with the Series B, so we feel pretty efficient in how we got to to 2.2 valuation, which reflects the growth that's still ahead of us with very little cash.

Team actually, I mean, it definitely grew substantially compared to 02/17 or whenever we spoke back then, we've been pretty efficient and never had to go crazy.

Amit, just to be clear, it sounds like you still have the majority of that 65,000,000 from your last round in the bank plus the extra 200 today. So you've got sort of a war chest Yeah, of some are

not the majority, the entirety.

Got it. So you have like $260,000,000 or so in the bank right now. You can do whatever you want with it.

More.

That's a lot of pianos you can buy.

Yeah, maybe you can talk about the Alaska business or something.

I appreciate that about you. A lot of sort of tech CEOs, when they get at your stage, they sort of lose their personality. So I so appreciate when I see you putting up and sort of being self deprecating, even though I think you play pretty darn well on LinkedIn videos. Yeah. Talk... Let's back into here to understand more about sort of ACV growth, right? So as companies do what you've done, you know, grow very fast, you

almost always see ACV expansion. You told me back again in early twenty eighteen the average customer is paying about $30,000 in terms of average ACV. What's an ACV up to today on average?

Well, I didn't tell you that, you kind of calculated number.

Oh, did I bet?

I remember that interview, but it was less than that, right now it's north of 30, I mean if you... Yeah, so just looking at the average, Gong is like an entire spectrum of customers where like on the lower end it could be usually the minimum would be like 15 ks for smaller customers and and 7 figures on the upper tiers and like all the range in between

like and again this is like happening pretty fast like we always thought that one day like we'll get to very large customers but actually start reaching out to us a lot sooner. For a company our age, we're pretty diverse in terms of the size of customers.

So just to repeat that back to you, people can get started for as little as $15,000 a year just to start using Gong. They then can expand over time and you have customers paying north of $1,000,000 a year to use Gong.

Yes.

Any eyes on your first $10,000,000 a year account? I mean, how do you get there? You have to upsell this like crazy, get a thousand thousands and thousands of seats on them.

I I don't know. I mean, it's not that it's kind of like a trophy that we need to accomplish. I'm sure it will and and we're kind of like long term minded, it's not about things, grew because of the rate of reviews that we get from customer, that's what we want to get you know and I'm sure things will...

The rate of what?

The rave, we call it like raving fans, it's our number one operating principle, and we don't want just happy customers, we want this kind of like NPS, like in the 70s, and that's actually driving the growth. Usually we get into accounts and others will start wanting Gong, why do these guys have and you know, so it's pretty cool, I want it to, so it actually spreads virally within the account and we're not necessarily trying to win a bigger deal on day one.

Yep. Now, Amit, if I take the 1,500 obviously customers times even $30,000 ACV, it sounds like obviously you have a range and maybe it's higher than that on average today, but averages aside, that puts you north of $45,000,000 run rate today. Is that accurate?

Yeah. We're we're we're well north of that. Yes.

Do you have eyes on... Again, I'm just comparing this other series d founders I've had on. Right? I mean, assume you're getting close if you haven't already passed a $100,000,000 run rate. Do you think you'd do that this year if you haven't passed it already?

No, no, no. We're not not gonna get to a 100,000,000 this year. We're not far from that.

Okay, interesting. In terms of strategy to get there, whether it's, again, it sounds like it'll be more than this year, maybe next year, do you think it will more be a function of your upsell and expansion team driving more adoption and then increasing accounts respectively, or will it be new customer additions completely?

We have both, so we always kind of like, we have two things, first very strong new logo acquisition and second great expansion between customers, and we always have to calibrate. Sometimes there are a lot of expansions, the new team, people don't necessarily need to sell many new logos, so we started started breaking the accounts and making sure we pull both levers, but both of them are pretty strong. I mean, I've shared the zone of our

ADR plus the new logo, that's what drives the strong growth.

I mean, if you look at revenue growth over the past twelve months, what percent of the growth would you say came from expansion versus new ads altogether? Do you know?

I don't even like the top of my head. Both are substantial.

Fair enough. What about altogether ignore cohorts of where the growth came from, just total revenue growth past twelve months, what was that?

Customers We have so our history and we started selling like 2016 so we have about like three years of history those cohorts are around like two fifty

and north right percent of what they bought and they're still like most of them are like are still with us right so very very strong growth over time and retention lifetime value like all those metrics I mean that's one of the things about the valuation that our unit economics are very strong and the product power is

driving that.

Are there any really strong unit economics that you guys are very proud of and you worked really hard to hit that I haven't already asked about?

I mean you name it, so NBRs are, you know, LTV to CAC is like greater than five, you know, it's a virtual infinite with like very little churn that they have.

Tell me more, Amit, tell me more, let's touch on before we wrap up, let's just touch on CAC real quick. So let's just use a 30 a new $30,000 ACV account. What are you comfortable spending to get that account in terms of CAC?

I can easily spend like $30,000 because with very little churn, I can get like $150,000 a week and maybe even more. So we're not spending $30,000 but we could and it will still be pretty good business.

Where are you spending money when you are getting new customers? Obviously it sounds like you have an inside sales team, are you doing any paid?

We get... So obviously we're spending on product, right, so product drives, product gives you pricing power, gives stickiness, and it gets people to talk about you, so that's always our thinking. Second, we do some paid ads,

most of our, I think our inbound, it's hard to measure exactly, right, because things are all intertwined, but content marketing has been very strong for us, efficient on social media, so we create content that is very different and people absolutely love. We have three attributes for content. First, it's easy to consume, so not like 13 pages white papers that are a budget to read.

Second, it's immediately applicable. It's not some kind of like, you know, bold ideas that you could apply in twenty years, something I could use right now. You said about those words or things. Three, it is relevant to our audience, but only to our audience. It doesn't interest doctors or dentists or beauticians. It only interest people so it's kind of like self qualifying and that's creating a lot of falling and you drive not necessarily someone

reads the black post, if I got it by Gong, it does over time, it does create like recognition because we're

already getting this data, why is everybody talking about it? And that drives a lot of the numbers.

Do know you how many trials you're getting, new trials you're getting every month because of these strategies?

We get a ton and again we don't know exactly, we kind of gave up on trying to know exactly where they come from, it's not like a specific standard or anything. I mean we do some of those but it's like, you know, I spoke with a buddy and then he mentioned Gong, know, one of my four was mentioned Gong and I read a blog post and I saw an ad and I downloaded an asset and...

The strategy makes total sense to me. Yeah, that strategy makes sense.

I think people try to overanalyze. We've got to do things that are real and genuine over time they pay big dividends.

Yep. Last team questions here before we wrap up with the famous five. Of your team of three thirty, how many are engineers?

We have about 90.

90. Wow. Okay. And how many how many sales reps do you have that actually carry a quota?

I I don't know off the top of my head. I mean, they're... But, you know, definitely something in that like 60, 70. There are also SDRs if credit cards show, so anywhere between like 50 to 100.

Do you give your CSMs quota if they're only focused on driving expansion revenue or no?

CSMs are measured mostly on NPS, they're not sales people, they want to make sure the customer is getting the best possible service. They kind of do have NPS and renewal rate, which is kind of a proxy, but it's a very small portion of their compensation, so they don't try to pressure the customer anything, just to keep things top of mind.

Alright Amit, let's wrap up your famous five, number one favorite business book.

How to be a capitalist.

Supposed to make me feel good at the beginning of the interview so that I go easier on my questions. I

read a lot, I read a lot. Right now I'm reading nothing

What's but... It called?

Origin story right now, it's more of a history book, explains a lot of things by David Christian, it's a pretty good book, not like strictly a business book but it does give a lot of interesting angles about world and where it's coming from.

A lot of patterns applicable to business in that book. Number two, is there a CEO you're following or studying?

I wouldn't say following, but I'm a big fan of Steve Jobs. I only wish he was like a nicer people version of him, but it's sort of like product and marketing, definitely like that would be my choice.

Number three, besides Gong, what's your favorite online tool for building your company?

Easily LinkedIn. Everything is massive for me and for our company.

Number four, how many hours of sleep do get every night?

Like five, I'd say no more than five.

No more, that's not a lot.

It's not, it's just my clock. I don't even, like I said, I don't I that's where I wake up on my own on a weekend, right? So I don't need a lot of sleep.

That's great. And what situation are married? Single kids?

Married, two boys, 16 and 20. And how? Same woman for like twenty six years.

Wow, and how old are you?

I'm 56.

How old? 36? 56?

36? I

thought I was going to say, Holy mackerel. Okay, you said 56?

56, yeah.

56, okay. Last question, what's something you wish you knew when you were 20?

I'm a beginner rock band. I never wanted to be like intact. That was the plan. Didn't quite work out as well, but I'm pretty happy where I am.

What instrument would you have played if you joined a rock band?

Guitar, for sure. Still play it like when I get a little bit of time, but yeah.

Hello there, guys. Amit, there you have it, gong.io. They've been in the news recently, a $200,000,000 raise at a $2,200,000,000 valuation. That was up from a $750,000,000 valuation just about eight months prior when they did their $65,000,000 raise back in December 2019. They're serving over 1,500 enterprise customers. Over 60,000 sales reps use the platform actively. Again, a new way to really measure and gain revenue intelligence from your sales functions as they look to continue to scale.

They won't hit $100,000,000 in run rate this year, but obviously it is on the radar as they continue to scale, focus on expansion revenue where net revenue retention today is over 150%. Amit, thanks for taking us to the top.

Thanks very much, Nathan. My pleasure.