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Norwest showed conviction and belief in the company at a time when others didn’t.
Amit Bendov, Co-founder and CEO, Gong
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Company Info

Company: Gong

Industry: Revenue intelligence

Website: www.gong.io

Founded: 2016

Headquarters: San Francisco, CA

Norwest investments: Seed, Round A1

Investors
  • Dror Nahumi Photo Dror Nahumi
Venture Enterprise

Gong: An Experienced Entrepreneur Solves a Problem for Himself – and for Thousands of Customers


Executive Summary

Amit Bendov had a vision for a sales-management application that would solve a problem he had encountered as an executive at two start-up companies: incomplete information about customers and prospects. With the early backing of Norwest, Amit and Eilon Reshef, his co-founder, started Gong. The company quickly achieved success with thousands of customers, created a new category of revenue intelligence applications, and reached a market valuation of more than $7 billion just six years after its founding.


 

One of the most important factors for an entrepreneur to be successful is a deep understanding of target customers and the problems they’re trying to solve. Amit Bendov, CEO of Gong, didn’t just understand the problem; he lived it. And by setting out to find a solution, he built a company that rocketed to market leadership and a multi-billion-dollar valuation.

Gong is the global leader in revenue intelligence, which applies artificial intelligence to the process of tracking the progress of relationships with current and potential customers. Gong has had such success with its Revenue Intelligence Platform that leading market research firms such as Gartner have adopted “revenue intelligence” as a distinct category of software – of which Gong is the leader.

Amit Bendov, Co-founder and CEO, Gong

Amit Bendov, Co-founder and CEO, Gong

When Amit was chief marketing officer at Panaya, and subsequently CEO of SiSense, he observed a consistent problem with the process of acquiring and keeping customers: the record of interactions was incomplete. Summaries might be loaded into a CRM or sales-management system, but they didn’t capture all the details and nuances. That meant decisions were made as much by guesswork as by facts and insight.

Amit and Eilon conceived of a product that not only recorded customer conversations but processed them through AI to understand exactly what was said, both positive and negative. This product would then coach sales teams on how to close the deal by highlighting warning signs and offering advice.

Norwest Intrigued by the Concept

One of the people with whom Amit discussed his idea was Dror Nahumi, a general partner with Norwest whom he had met when raising capital for an earlier business. “I liked the way Norwest does business,” Amit says. “They build close partnerships with the executives of their portfolio companies and offer valuable support and advice in so many ways.”

Nahumi respected Amit’s track record of growing companies and “I thought the idea was interesting enough that I should evaluate its potential.” So, he called more than a dozen companies that could be potential customers, to discuss the idea.

“I heard a lot of positive validation,” he recalls. In addition, one of Norwest’s portfolio companies evaluated an early version and gave it positive reviews.

Further due diligence led Nahumi to conclude that Amit’s idea was worth an investment. Nahumi and Shlomo Kramer, a prominent Israeli entrepreneur and investor, teamed up to make an investment. Together, Norwest and Kramer put $6 million in seed money into Gong.

“The idea was sound, the addressable market was attractive, and in Amit and Eilon we had entrepreneurs with a strong knowledge of technology as well as go-to-market experience,” Nahumi says.

I liked the way Norwest does business. They build close partnerships with the executives of their portfolio companies and offer valuable support and advice in so many ways.
Amit Bendov, Co-founder and CEO, Gong

Founders Use Seed Money Efficiently

Nahumi and Kramer’s faith in the Gong founders was well-placed. It took just three months and only $1 million of the seed money for Gong to produce a viable product that customers could evaluate. Nahumi praises the small team at Gong for their efficiency and focus.

“They built only what they needed to at the time. Whatever technology they could buy, they did so to get products in the hands of customers. They did an amazing job of getting the basic infrastructure in place and then focusing on the application layer. Over time, they strengthened the infrastructure while improving applications based on customer feedback.”

In 2019, with high conviction of the business, Norwest and Kramer led the second round of financing, raising another $20 million. “It’s unusual for the same venture capital firm to lead a subsequent round,” Nahumi notes, “but we saw the potential for Gong and were impressed by what the team had accomplished.”

Six years after receiving the seed money, Gong had achieved annualized revenues in the hundreds of millions of dollars and exceptional unit economics.

“The response Gong got was unbelievable. It now has thousands of customers, and the reviews on the G2 site (software reviews by actual users) are among the best you’ll ever see. I attribute this success to the company’s performance in all aspects – recruiting, onboarding customers, pricing, when and how to raise money, and more,” says Nahumi.

Gong Establishes a New Market Category

While all aspects of Gong’s company performance played a role, Nahumi cites two major factors in the company’s success. The first was that “Amit really knew how to be super-efficient with funding to get to market fast, rather than spending on some crazy technologies and get to market late. That made a big difference.”

The second factor was “fantastic marketing.” Nahumi says, “Gong created a whole new category – revenue intelligence – and the market followed suit. Everyone else is copying Gong and trying to compete.”

While Nahumi lavishes credit on the team at Gong, Amit also has kudos for his initial backers. “Dror and Norwest showed conviction and belief in the company at a time when others didn’t. Every other firm declined to join us.”

The strong partnership with Norwest has continued through the growth of Gong. “Norwest has helped us recruit key executives, introduced us to customers and connected our senior team with other leaders in the portfolio to share best practices and learn from one another,” Amit adds.

Nahumi reflects on Norwest’s “invited guest” approach to working with its portfolio companies: “We act as advisors and a sounding board; the management runs the business. When Gong was in the early stages, they had their office in the basement of a Norwest building; no windows, just enough space to make calls to customers. That’s the kind of close relationship we build from the start.”

One of the reasons Nahumi says he had confidence in Gong was that “Amit was basically a customer. He knew what he needed as a user, which helped him build the best application. So, it’s very rewarding to see his vision validated by such rapid and strong customer adoption.”

“Like every great company that has built a new category,” he continues, “there will be more key milestones to reach as the business grows. We look forward to working with the outstanding Gong management team and board members as we write future chapters in Gong’s journey.”

Investment Snapshot
Gong Investment Opportunity
  • Build a platform that captures a complete account of interactions with customers and prospects, to shorten time to revenue
  • Apply artificial intelligence to recordings of customer calls, to provide actionable advice to sales teams
Market Trends/Drivers
  • Data-driven sales teams demand accurate and unbiased data about current and potential customers
  • Targeted use of AI can reduce huge volumes of raw data into actionable insights
Norwest Investment
  • Led seed and round A1, participated in series B, C, and D
Portfolio Services Utilized
  • Business Development
  • HR & People Advisory
  • Operating Executives & Senior Advisors
  • Operations Strategy
  • PR & Marketing
  • Talent & Retention