How G2 Plans to Break $100M ARR With G2 Track and Taxonomy Licensing

This is wild. I bet you had no idea you could build a $100,000,000 business for a review website. That's right. A review website. That's exactly what CEO Godard Abel did when he launched G2 in 2012. Here are three numbers you need to know. Number one, they hit a $100,000,000 in revenue last year. Number two, they broke a $1,100,000,000 valuation in 2021 and have raised 240,000,000 to date. And number three, there's over nine thirty six folks full

time on their team. What about usage? How many people actually use the site? Here are three numbers you need to know. There's 2,000 software categories on G2. There's over a 100,000 software products listed across those categories and listings growth was 48% over the past twelve months. If you wanna see how Godard has done this and it's not his first time, he's done this many times, you'll want his playbook. Let's jump into his $100,000,000 playbook right now.

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 a $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. Hey, folks. My guest today is Godard Abel. He's the CEO of G2, which I'm sure many of you guys have seen. You've seen the badges flying around LinkedIn.

Everyone wants to be top ranked on G2. That's because it's a leading business software review website and marketplace, which he co founded in 2012. Godard, are ready to take us to the top?

Yes. Let's go, Nathan.

So this is not your first rodeo. You you gave a really great talk at our last Founder event where you summarized some of the other companies you've built. Are you having as much fun building this one as the last three or four?

Yeah, but I will love entrepreneurship. It's always different, but I am enjoying the new challenges.

I love that. So let's talk a little bit about products. We had you on recently. Obviously, most people think about G2 as a review site, right? How do you think about product expansion? What's next?

Yeah, I think one of our exciting new products is G2 Track. And G2 Track is all about helping CIOs, CFOs track all of their SaaS and cloud spend. We think it's especially relevant now, a bit of an economic downturn. So everyone's trying to also figure out, am I wasting money on some of my SaaS? Are there gaps in my tech stack? And with G2 Track, we can help companies figure that out in real time.

And so how should folks think about G2 Track relative to, you know, vendors of the world and other sort of expense management tools?

Yeah. We do partner with vendors. I think vendors are really good at negotiating SaaS contracts and they're more full service. G2 Track is really about giving you data benchmarks and it works by API. We hook it up to your financial system. Let's say you're running NetSuite, Intech, QuickBooks, we parse all your spend data, look at your usage for using something like Okta and then benchmark it against all G2 database to help you figure out are you

have some duplicative apps, are there areas you can save money? And on the other side, are there gaps in your stack where there's new products we'd recommend? I think we're really excited about the potential of Track.

And I guess your ability to make smart recommendations there is directly dependent on your ability to convince founders and CFOs to actually connect the data. You sort of have a bit of a marketplace problem there, but you are the marketplace king. You've solved this with reviews. How do you think about figuring out that sort of connection equation and making sure you have a big database to make smart recommendations based off of? Right.

And the good thing for us, it's the same database, you know, that powers g2.com because on g2.com we have over a 100,000 SaaS software products listed. We categorize them in over 2,000 categories, but it's a very dynamic taxonomy. And frankly, that's one of the key assets for Track. That's one of the challenges for CIO, CFOs. A lot of companies are running hundreds, if not thousands of apps. Frankly, if you're the CIO, CFO, you don't even know

what they do because marketing buys its own apps, sales buys its own apps, product buys its own apps, you just see their spend, but they have no idea what they do. Having that taxonomy, being able to match products and then even using the review data, seeing what businesses like yours are having success with on g2.com based on that feedback is actually essential, we think, to making very data driven stack assessments. And so that's why we see

the two very synergistic. And also going the other way, Track can also help inform the insights we provide on g2.com because it gives us a deeper look into what companies are spending on, how that's trending, where they're actually having success. And so that's why we see it being very synergistic to what we're already building on g2.com.

You mentioned over 100,000 software companies on G2, the value of the taxonomy, the dynamic taxonomy you've built and how that feeds into Track. How many people have connected real time API feeds into Track today?

Yeah. And I think we have, it's a few 100 companies and we have both a free and a paid version. We have about 100 on the paid version now, which is, I think, big milestone because in some ways, Track is a SaaS startup within the greater G2, but obviously fully built into the data and the architecture. We're excited and we do think second half of this year, we'll see a lot of momentum with that product because

I think everyone is trying to figure out where to save a bit of money to also better weather the economic downturn.

You said 100 on the paid version of Track. What does paid mean? How do you make money on this product?

Well, I think it's a SaaS subscription, like any product, you know, but with paid, there's additional features. Especially, I think, you want APIs to more enterprise systems like NetSuite, like Okta, that's when you go to the the paid version of Track. But if you're running QuickBooks, if you're a startup, you can try it for free.

I see. So if there's a large enterprise with $50,000,000 in revenue that wants to use Track to manage their spend and they also use Okta, when they click Connect to Okta, you might say, Wait, you need an enterprise plan. Here's a $300 a month fee to sort of access that.

True. And the other thing we do for the bigger companies is we have a contract concierge service because to really make track work well, you also want to track the key contract terms such as renewal dates, whatever kind of price uplift there might be. Frankly, there isn't a great way to get all that data into a system without doing some contract entry. We have a contract concierge service that's also part of our paid solution and that

can really help companies be more proactive in managing their whole SaaS and cloud service stack.

Some of the fastest growing SaaS companies say, Well, just sign three year contracts and they build in, you called it price uplift, but it's effectively a natural accelerant each year where the value of the... Or the ACV increases whatever 5%. You're on the flip side trying to prevent your customers from paying more for something like Salesforce, for example. Are you seeing right... Go ahead.

Yeah, I just say we're on both sides of that. We just want people to be aware. And I think, and I'm also an entrepreneur, right? And I think that's key for a SaaS seller. If you want to do that, you have to provide more value each year. And obviously, I think some vendors do a great job of that, right? But if you're not providing upgrades, more value each year, then yes, then the buyers, your customers will

question that hard. And for the buyers, we just want them to be aware, you know, and have that visibility because sometimes there are surprises, right? Like And nobody's looked at the contract and turns out there's like a ninety day opt out. And if you don't, there's whatever uplift there is. And I think that's all fine as long as you're aware of it, as long as you feel like you're getting enough value, but obviously CIO, CFOs don't want be surprised and that's, you know, track to make sure that they have full visibility and they can be proactive.

Godard, when you look at the ecosystem of folks that are helping SaaS companies track their spend, who right now do you feel like has the most data, the most live connections to SaaS companies?

Yeah. And honestly, I'm not sure. I do think in terms of the negotiating, you know, and really, I think vendor obviously has great momentum, right? They just raise a bunch more money. And, you know, so, but I think in terms of actually gathering data, you know, we feel like we're we're in a good position.

Mhmm. Now you're also well capitalized. I believe your last round was 157,000,000 series D last year. Right?

True.

And broke the 1,100,000... Billion, sorry, valuation mark? Yes. That was very exciting. Any more capital raised since then or no?

No. And we don't... I don't think now would be a great time to raise capital. Yeah. Although I think we're also lucky. I don't think we raised at, like, some crazy, crazy multiple.

Well, you told us. I mean, you told us right around there you're breaking like a few 55 ish million run rate. So that was a 19 x ish multiple, right, if that's accurate. I'd say that's a fair multiple, not crazy.

Yeah. No. And we we are growing well. You know, I think this year, we'll definitely break through a 100,000,000 ARR. So...

Oh, wow. Yeah. And Godard, that's a big that's a big announcement. That's exciting. I mean, how close... I mean, are we like... Is that a stretch goal? You you you feel pretty good about that?

No. I think we'll... I feel good at definitely getting there by year end. And certainly when we do hit it, you know, we'll we'll share that with you because it will be...

That's exciting.

And I think in a lot ways... And I probably agree. In a lot of ways, it's it's more exciting to become a unicorn, at least last year. Like, because last year, becoming unicorn was probably easier. And, you know, then breaking through a 100,000,000 ARR. As you know, not that many SaaS vendors hit that milestone, so...

Yep. No. It's rare.

We're excited to get there.

I mean, that means right now you've got to be somewhere between, like, sort of $8,085,000,000 in ARR. Right?

I'm not gonna confirm that, but but we will get through a 100 this year.

All right. Fair enough. Very cool. Last question I want to ask about before we wrap up. I would argue one of your biggest assets is your ability to accurately taxonomize hundreds of thousands of software companies. How on earth do you do this?

Well, I think we have the advantage that vendors, software vendors, software sellers, they want it to be right on G2. And as you know our model, so if you're a SaaS entrepreneur, you can list on G2 for free. And then we also ask you what category you're in. And then obviously as vendors grow like our friend, at zoom info, right? Obviously they grow well beyond one product, one category. So now zoom info, somebody like that's probably

in 30 categories, but we actively work with their product marketing, their product teams to make sure they're properly classified across all of their products. And that's never done. Yeah. Cause vendors like zoom in for always innovating, entering new categories, launching new products, but I do think we've become an essential part now of our industry. You know, where if you're a software vendor, you want it to be right on G2 so that software buyers, and we have

about 7,000,000 a coming to G2 if they discover you, you know, because you don't want to be missed. And so that's why there's a nice synergy, you know, with our community of vendors and, and also I think more entrepreneurs. I think the number of listings on G2 has grown 48% over the last year. That's wild. That's very exciting. But it's very collaborative with our community of vendors and they're always helping us update it. We do have

a research team and it's a pretty big job. We have about 50 people in our research team always working with the vendors because not only do we categorize them, but then we come up with different questions to figure out what are the key features in each of those categories for each of those products. We also can ask the users the right questions about how well those products are working for them. But I agree it's a big

asset. And that's also spawned a new business for us where we do license our taxonomy to partners. One of them, for example, is ServiceNow. ServiceNow, I think, as you know, leading IT platform cloud company, But they also have an IT asset management tool to help them categorize all their apps. They now use the G2 taxonomy. And it's also something investors are now licensing. We have an investor data solutions business at G2, also very exciting. We have

about 50 of the world's leading SaaS investors now also using G2 data, and the taxonomy also helps them just to try to make sense of who are the competitors for this, you know, deal, what are adjacent markets. And, so I think it is exciting asset, you know, very dynamic asset that we keep building.

Guys, exciting times at G2. Again, broke the unicorn mark last year and caught 55 ish million revenue. Godard feels good about breaking the $100,000,000 mark this year. Also breaking into new lines of business. He sounds like most excited about G2 Track, which helps you understand and manage your SaaS expenses, which is especially important in a downturn like we're going through now where everyone wants to save cash flow, ideally get profitable and back to breakeven, increase runway. Godard, G2, thanks for taking us to the top.

Yeah. Thanks, Nathan. Great to see you.