Raleigh-based Levitate announced a new $6 million infusion Tuesday.
The round was co-led by Bull City Venture Partners and Tippet Venture Partners.
CEO Jesse Lipson, who also personally invested in the round, said the $6 million will give the company, which provides marketing software to businesses, a runway “well into next year.” Part of the proceeds will go toward growing the sales team. The company is at just under 150 employees and is in the middle of what Lipson describes as “cautious growth.”
“We’re being responsible, making sure to pay attention to our cash burn, but we are also growing and have a good opportunity in front of us,” he said Tuesday.
But the bulk of the proceeds will go toward funding the firm’s new sales prospecting product, called Coffee, which it officially launched this week.
Coffee wasn’t something Lipson intended to release broadly – at least not at first. It came from an internal need. As Levitate scaled, it got to a size where it was difficult to manage via the HubSpot CRM system it had been using since inception.
“We looked around for other tools we could use on top of HubSpot,” Lipson said. Finding none, the company decided to create one, using it internally for months. The decision to spin it into an actual product wasn’t something Lipson entered into lightly, he said. The company evaluated feedback, even bringing on a pilot customer in Raleigh-based RevGen.
While launching a product based on an internal pain point can be a benefit – allowing you to work out all the kinks before sharing it with the world – it can also be a distraction, Lipson said.
“You need to make sure that, as a company, you’re ready to be a multi-product company,” he said.
Levitate, at more than 3,500 customers with its core Levitate product and more than $10 million in recurring revenue, was big enough to take the risk, he said.
The Coffee tool integrates with HubSpot and aims to simplify prospecting by automatically serving leads based on factors such as time zones. And it has built-in gamification tools such as a real-time leaderboard, aimed to make cold calling fun for sales reps.
Lipson, a Duke University philosophy graduate-turned coder, started Levitate after leaving Citrix, the company that bought out the last startup he founded, ShareFile, in 2011.
ShareFile was completely bootstrapped. By seeking outside capital for Levitate (founded as Real Magic), the growth can happen faster, he said.
