ZoomInfo invests $575 million in Chorus.ai as artificial intelligence shakes up the sales sector

ZoomInfo announced this morning that it will pay $575 million for the conversational sales intelligence platform Chorus.ai. According to Yahoo Finance, ZoomInfo shares are flat in premarket trade following the announcement.

Chorus' market is sales intelligence, which utilises AI to "listen" to sales conversations in order to improve relationships between salespeople and customers. ZoomInfo is well recognised for delivering consumer information, thus the purchase significantly increases the acquiring company's platform.

According to a press release, the company sees an opportunity to bring together different parts of the sales process in a single platform by “combining ZoomInfo's historic top-of-the-funnel strength with insights driven from the middle of the funnel in the customer conversations that Chorus captures.”

“With Chorus, the entire business can make smarter decisions by exposing insights and analytics that you would only obtain if you sat in on every sales or customer success call,” stated ZoomInfo CEO and founder Henry Schuck in a blog post announcing the acquisition.

ZoomInfo was valued at slightly about $21 billion before to the purchase.

Chorus searches for “smart themes” in sales calls to assist managers guide sales teams toward the sorts of conversations and tone that are likely to produce greater revenue.

According to the firm, Chorus has the largest patent portfolio relating to conversational intelligence.

According to PitchBook statistics, Chorus was formed in 2015 and has raised more than $100 million. Last year, a $45 million Series C investment was completed.

According to Crunchbase News, Chorus has “doubled its workforce to more than 100 people and quadrupled its income over the last year” at the time of its Series C round of investment. That is the type of growth that venture funders seek, so the company's 2020 fundraising round comes as no surprise.

Notably, PitchBook data shows that the company's final private valuation was around the $150 million mark; if accurate, this would imply that the company's last private round was expensive in terms of dilution, and that its investors did well in the exit, quickly farther than trebling the capital that was last invested, with earlier investors doing even better.

However, considering the growth that the firm reported at the time of its Series C, we are little suspicious of the company's published valuation history; it feels low.
If this is the case, the company's exit multiple will fall, making its ultimate sale price less attractive.

Of course, a half-billion-dollar exit is always significant, even if venture investors are more interested in $1 billion and bigger exits in today's hot, costly market.

However, considering the growth that the firm reported at the time of its Series C, we are little suspicious of the company's published valuation history; it feels low. If this is the case, the company's exit multiple will fall, making its ultimate sale price less attractive.

Of course, a half-billion-dollar exit is always significant, even if venture investors are more interested in $1 billion and bigger exits in today's hot, costly market.

Chorus.ai will most likely not be the only company to leave the conversational intelligence sector. Its competitor Gong (commonly referred to by its URL, Gong.io) is one of the hottest startups in this sector, having received more than $500 million.

Last month, it raised $250 million on a $7.25 billion value.

Given the amount of clients implied by the two firms' aggregate worth, the application of AI to audio data in a sales environment is very helpful, according to the implication of the Chrous.ai departure and Gong's large private valuation.