Over the last 18 months, we spoke with over 100 sales and marketing leaders, studied past approaches to the sales and marketing stack, and projected how AI will change go-to-market in order to develop our perspective on the next era of go-to-market technology.
Ultimately that work culminated in our deep conviction that Clay will become the de facto go-to-market platform for the AI era.
We are not alone in that conviction. Leading companies like Rippling, Canva, Grafana, Figma, Anthropic, and OpenAI are all using Clay to power their go-to-market efforts already. The novel workflows that these companies bring to life in Clay blew us away, and showed us the potential for what the future could look like – not one of flooded inboxes full of “AI slop,” but rather one where human creativity, with the help of AI research and automation, creates new go-to-market motions we could only dream of before.
For decades GTM teams have had to deal with a suite of point solutions that chip away at pain points but in aggregate created a Frankenstein's monster of disconnected tools.
For the first time, Clay gives revenue teams a single platform from which they can launch any campaign, limited only by their imaginations.
Clay marries first party data (e.g., product usage data, Gong transcripts, or support tickets), third party data (e.g., name, email, or even data from Google Maps, Pitchbook, or GitHub), and AI research data (e.g., find a company’s SOC II certification status, number of CSM jobs currently open, or current site status) to give GTM teams a holistic picture of their customers and prospects. Clay then connects with dozens of products to take action on that data. You can of course send an email through Clay, but you can also create a custom landing page through Webflow, send physical mail through Sendoso, or launch an ABM campaign on LinkedIn. Most importantly, you can create a campaign that does all of these things in concert.
Clay’s founding team brings the technical depth, customer obsession, and long-term orientation we believe necessary to build a truly generational product in this category. We see both Kareem and Varun as some of the best entrepreneurs of this generation and have been impressed by the team they have assembled so far.
We are thrilled to lead their Series C.
Below is an abridged version of our go-to-market thesis that led to our investment.
Sales tech is a large profit pool, but has been a challenging space to build in
The sales tech profit pool is an attractive one at ~$22B vended spend, but it is largely dominated by Salesforce ($35B total revenue, $12.5B revenue from Sales and Marketing Clouds) and Hubspot ($2.5B revenue). Many companies in the past decade have built to solve specific problems in the sales stack (call recording, email sending, auto-dialing) and moved horizontally to solve other individual pain points for growth. The net effect of this has been high degrees of competition, and choice, for tools in the sales stack.
The sales stack is and will remain fragmented
The average number of tools in the S&M tech stack for customers we interviewed is 11. While many teams express frustration with tool fatigue, we believe the sales stack in mid-market and enterprise will remain fragmented for the following reasons:
New entrants will continue: The sheer size of the S&M profit pool will continue to attract new companies to build in this space.
Mid-market and enterprise teams prefer best in breed: Revenue teams at mid-market and enterprise companies are often given latitude to choose the tools that they need to drive revenue, and every MM+ CRO and CMO we spoke with preferred to have best in class tools, especially for mission-critical products like CRM and enrichment.
SMB companies may consolidate parts or all of their S&M stacks to save costs, but MM+ companies will likely always need to work across multiple systems.
Salesforce wins because of its integrations
Salesforce has remained such an entrenched player for so long not because it has a better UI or a higher NPS among sales reps, but because it has an extensive set of integrations and customizations. RevOps teams see Salesforce as an inevitability - at some point every team will need a degree of flexibility that another provider cannot offer, so they will move to Salesforce.
Critically, Salesforce does not achieve this flexibility by building everything itself. It achieves it by: (1) having the deepest integration ecosystem on the market, (2) having an app ecosystem built on top of its Force.com platform with customizations for different verticals, and (3) nurturing a thriving community of ISVs and implementation partners that deepen customers’ use cases and extend Salesforce’s distribution. Salesforce can offer its own products on top of this flexible infrastructure, but Salesforce continues to win not because of the completeness of its offering, but rather because of the depth of its flexibility.
Many companies see the outpouring of complaints about Salesforce’s user experience and build products to address the user experience of the rep. But the sales person is not the buyer. The true buyer -- RevOps -- is willing to buy additional tools to make the workflow easier for sales people rather than give up the flexibility they require. Clay uniquely understands the requirements that modern GTM teams have, and is building the integration depth, app ecosystem, and partner community required to win.
Clay: An integration-first approach to the sales stack
Clay takes a unique approach to this problem.
Starting with a broad and deep integration ecosystem, Clay allows companies to log into a single UI and leverage different tools (including Clay’s own data and workflows) to automate workflows across the entirety of the sales and marketing flow. In doing so, Clay enables entirely new go-to-market motions previously not possible for revenue teams.
Clay has remarkable customer love. Customers on average rated Clay a heroic 9/10 (n=40), and have repeatedly told us that Clay is “leaps and bounds better than anything we had been using,” that the ROI on Clay is “a total no brainer,” that “Clay is going to meaningfully change how we go to market,” and that they would pay 50-100% more for Clay for what it does today.
Customers consistently describe three high-ROI impacts of using Clay:
More deals closed due to better lead enrichment. Clay waterfall enrichment sources contact information from over 150 integration partners to give companies the best enrichment coverage available.
Cost savings. Customers report cost savings on data providers and headcount with Clay. Customers can replace multiple contracts with a single Clay contract, and customers have reported replacing both BDR headcount and BPO spend with Clay.
Long tail value-add use cases. Clay’s depth of integrations allow customers to solve problems they never could have before. What if you are targeting small businesses and want to know their location? Instead of having BDRs manually look that information up, you can enrich from Google Maps in Clay with a click. Targeting developers? Import the Github data. Want to reach out to someone when they use a certain feature in your app? Use Clay’s API to integrate product information and you’ll have timely outreach that takes minutes to set up. The depth of these integrations allows companies to use Clay for customer engagement, upsells, and renewals in addition to outbound sales.
Clay’s compound market
Brownfield “land” market: Enrichment
The first benefit many customers experience from Clay is solving their enrichment problem. Enrichment is by far the most fragmented part of the sales stack. Every company needs data enrichment, and because no firm can have every data point for every segment globally, every company of scale needs to have multiple enrichment providers. Some companies we spoke with had more than 5 contracts with individual enrichment firms, and still didn’t have perfect data coverage. Coming from an integration-first mindset, Clay allows companies to log into a single, beautiful interface and configure a waterfall that accesses dozens of enrichment tools, giving teams perfect data coverage with the click of a button–all without having to navigate dozens of individual contracts.
Companies today spend $4B on traditional data enrichment, an additional $2B on intent data, and a further $35B on outsourced BPO providers for sales and marketing. Clay uses AI to replace BPO spend for many customers we spoke with, opening up an additional TAM that dwarfs traditional spend.
We particularly like enrichment as a land market. Before any other action in the GTM workflow can happen, you need a contact with contact information. Companies that start below enrichment in the GTM workflow will always either have to build into enrichment, or cede that ground to someone else who has. Enrichment also has a highly quantitative sales process (which provider offers best coverage and data quality) and a direct tie to ROI (more leads directly translates to more revenue).
Greenfield “expand” market: Workflow software
Clay was not initially built to be a sales enrichment tool. Clay’s initial infrastructure was built as a horizontal platform with the aim to bring the power of programming to more people. That technical foundation layer includes a flexible data model and a robust integration platform that allows Clay to integrate with all types of tools and manipulate complex workflows across a broad set of use cases. The Clay team spent years building this robust and flexible integration platform before ever going to market as a GTM tool.
Customers come to Clay not just to find data, but to act on it. Through Clay, customers can not only send emails, they can also create custom landing pages through Webflow, send physical mail through Sendoso, and launch an ABM campaign on LinkedIn. Customers repeatedly told us that they can orchestrate campaigns in Clay that would be impossible, or at least time prohibitive to put together otherwise. This workflow aspect of Clay creates near unlimited greenfield expansion opportunity for Clay.
How sales teams will change with AI tooling
Inevitably as sales and marketing teams start to leverage AI, we will see an increase in volume and a corresponding decrease in quality. This increase in volume will lead to diminishing returns on pure volume-based strategies as inboxes get even more crowded, while novel, creative approaches and more nuanced, timely communication will win.
We see three very plausible possible outcomes for how GTM team structures will change in the coming decade(s):
Sellers are replaced by AI colleagues. In this view of the world, outbound is entirely automated by AI. Roles like BDR/SDR, and eventually others become fully automated by agents. Early entrants in this world compare cost to human labor, but in the limit prices will be compared software to software (or agent to agent) resulting in steep price compression. Quality is likely average until agentic AI can reach L4 innovation capabilities. In this view of the world, AI helps dramatically increase the volume of outreach, and likely brings the caliber of that outreach to a universal average.
Sellers are augmented by AI copilots. In this state of the world, sellers continue to exist but spend all of their time on human interactions, with the rest of their existing day to day work (research, prep, deck creation, pipeline updates, even routine follow up emails) automated by co-pilots. Marketing runs their campaigns separately.
Growth is managed more centrally from AI-powered control panels. In this state of the world, centralized ops and growth teams configure highly customized omnichannel campaigns, while sellers focus on individual interactions that require human touch. In this end state, we see a barbell distribution of work: all or most of the work that is “outreach at scale” is done centrally, while all work that is 1:1 is handled by the rep. In this view of the world, AI helps make the best better, scaling teams’ most unique or creative ideas but without the focus on sheer volume we see in scenario 1.
As we look to the past as a helpful indicator of a possible future, we see a pattern of scaled outreach centralizing with increasingly technical teams (e.g., advent of growth marketing, RevOps, and ultimately pure “Growth” teams that straddle Product and Marketing). We believe that trend will continue.
While the above scenarios are not mutually exclusive (i.e., aspects of multiple may come true), we have deep conviction that the companies that are most successful in implementing AI in their go-to-market workflows will be the companies that use AI to enact more creative, more timely, and most critically more unique prospect and customer experiences. As these companies pull ahead by effectively using AI for growth using tools like Clay, more companies will ultimately follow suit, and that will become the new requirement for all.
Clay as a platform for sustained growth
As new growth avenues come to market, early adopters are able to capture outsized returns for a period of time. Ultimately, word spreads, and as more companies start to use that new avenue for growth, its efficacy declines. Take display ads as an example – the first display ad in history had between a 44-78% click through rate (depending on the source). Today the average CTR for a display ad is a fraction of a percent. The same has proven true for cold calling, email marketing, and SMS marketing.
The advantage, or “growth arbitrage” of a new channel or technique is short lived. What we find so compelling about Clay is that it is a growth platform. Clay enables teams to continually experiment with new data and new motions, and scale the ones that work. There is a virtuous cycle with Clay, whereby it allows teams to test an idea they could only have dreamt of before, and the process of seeing that new motion come to life sparks ideas for other new ideas, and the process repeats.
Historically we have seen significant value accrue to platforms that power the growth of their customers. We believe that Clay has the potential to be the de facto go-to-market platform of the AI era.