16 customer relationship management firms taking on Salesforce and Microsoft that experts say to watch in 2021

  • Salesforce is the leader of customer relationship management (CRM) software, holding 18.4% market share (though Microsoft is steadily posing greater competition with its own CRM software, Dynamics 365). 
  • However, because Salesforce targets large enterprises, CRM companies that cater to small and medium-sized businesses are thriving. 
  • Business Insider asked venture capitalists and analysts to name CRM firms that are competing with behemoths like Salesforce and Microsoft — here are the 16 they recommended. 
  • Got a tip? Contact this reporter via email at [email protected] or Signal at 925-364-4258.You can also contact Business Insider securely via SecureDrop.
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When it comes to customer relationship management (CRM) software, Salesforce is usually top of mind. Two decades ago, the cloud giant pioneered new way to deliver software over the cloud via subscriptions, changing CRM software forever. 

Even now it has an iron grip on the market, holding a 18.4% share as of 2019, according to a report from IDC. By contrast, other large players like SAP, Oracle, Microsoft, and Adobe have single digit percentages (although Microsoft is aggressively investing in its own cloud-based CRM application, called Dynamics 365). 

CRM software generally includes customer-facing tools for divisions like sales, customer service, and marketing and has traditionally served as an electronic Rolodex-of-sorts for a company's customers. But the software is quickly evolving, said a senior research director at Gartner, Brian Manusama. 

Nowadays, companies don't want their CRM systems to simply help their own employees, but also to make their overall customer experiences smoother and simpler, too, Manusama told Business Insider, by, for example, providing tools to automate online problem-solving processes for customers. As automation capabilities become standard for modern CRM systems, that often means integrations with outside applications or social media.

Salesforce is primarily built for large enterprise customers, so smaller CRM startups have popped up to cater to small and medium-sized businesses, Bessemer Venture Partner's Alex Ferrara told Business Insider. Also, because CRMs encompass a wide range of tools and software, many companies start in one category — sales, services, or marketing — and then expand outward from there.

"I think most modern organizations today want all of their employees to have access to customer data," partner at venture firm CRV, Murat Bicer, told Business Insider. "It's not just sales anymore."

As the pandemic pushed businesses to digitally transform faster than ever, modern CRM software is critical to helping them stay connected with customers. 

Business Insider asked venture capitalists and analysts to name smaller CRM companies competing with behemoths like Salesforce and Microsoft. They named both innovative startups and smaller companies that are growing in popularity. 

Some of these smaller companies could also be acquisition targets for big cloud firms looking to improve their own capabilities. For example, Facebook said in November that plans to acquire customer service startup Kustomer — reportedly for $1 billion. 

Here are 16 customer relationship management companies that experts say to watch in 2021:

(All private company funding amounts and valuations taken from Pitchbook.)

Pipedrive

Pipedrive is a sales management tool to help coordinate the sometimes complicated or lengthy sales process. It's tailored the help salespeople do their jobs as opposed to sales managers, which more traditional CRM systems focused on, said Bessemer's Alex Ferrara, who led Pipedrive's Series A round in 2015.

Pipedrive has customizable fields, Google Apps integrations for email, and data importing and exporting, so salespeople can plan their strategy, track deals, and record conversation history on one platform. 

Ferrara says it's a company to watch because it's very profitable and has a really great team of product and engineering folks on board.

Total funding raised: $95.4 million

Valuation: $1.50 billion 

Iterable

Iterable is an email marketing platform that helps automate the customer reach-out process.

The company was founded in 2013 and started with marketing automation before quickly realizing how much more it could do with the customer data stored on its platform.

It essentially allows companies to customize the way they interact with customers based on their preferences, said CRV's Bicer, who sits on Iterable's board. CRV participated in Iterable's Series A round in 2016. 

"It's giving you a more of that full picture of your entire customer base and how they're behaving," Bicer said. "I think that's the kind of scale that even Salesforce today wouldn't really be able to do."

Total funding raised: $141.84 million

Valuation: $535 million

Gorgias

Gorgias makes help-desk software — primarily for small online businesses — to help manage customer service. It uses machine learning and integrations with other software to create templates and suggestions on how to resolve customer service requests so businesses can respond quickly. 

The company was founded in 2015 and just raised a $25 million Series B led by Sapphire Ventures in early December. CRV's Bicer recommended the firm. 

Total funding raised: $44.77 million

Valuation: $325 million

Freshworks

Freshworks is best known for its customer service product, Freshdesk. It was founded in 2010 after CEO Girish Mathrubootham saw an opportunity to change the way companies handle customer support.

In the 10 years since, Mathrubootham has expanded the firm's customer support focus to build a platform that provides software to help manage every interaction a customer has with a company, from marketing to customer support. The company is headquartered in San Mateo, California, although the majority of its employees are based in India.

Freshworks' strengths continue to grow because it has made a number of acquisitions over the last few years to build out its platform, Gartner's Manusama said. 

Total funding raised: $401.1 million

Valuation: $3.5 billion

SugarCRM

SugarCRM, founded in 2004, offers a range of customer experience tools including for sales, service, and marketing divisions. A recent Gartner report called SugarCRM's products "easily configured and customized."

In addition to sales automation, customer service, and marketing tools, SugarCRM has also added products for data visualization, analytics, and integration.

"They've got a pretty comprehensive offering compared to most smaller market CRMs," said Nucleus Research analyst Dan Elman, who expects the firm to keep growing.

Notably Salesforce has a similar line-up of products in its CRM platform. 

SugarCRM was acquired by private equity firm Accel-KKR in 2018. 

Total funding raised: $119.64 million up to 2013, unknown after that

Valuation: Unknown

Techsee

TechSee is a customer service platform that uses new technologies like artificial intelligence and internet connected devices, while also serving as a traditional CRM. In particular, it can help field service agents who respond to customer support requests at specific locations, allowing them to connect with customers via a live virtual chat.

The company is based in Israel and raised a $30 million Series C round in August led by Salesforce Ventures, TELUS Ventures, and OurCrowd. Gartner's Manusama recommended it as a field service-focused CRM company to watch. 

Total funding raised: $53.50 million

Valuation: Unknown

Hubspot

Hubspot started as a marketing automation company, making it easy for small businesses to launch marketing and go-to-market strategies. Once Hubspot started seeing how its platform could use the customer data it was collecting, however, it began adding more features to make it a full CRM platform, including sales and service software.

The company went public in 2014 and has 95,000 customers. It is headquartered in Cambridge, Massachusetts and run by its cofounders Brian Halligan (CEO) and Dharmesh Shah (CTO). 

CRV's Bicer and Bessemer partner Ferrara both noted that Hubspot was a smaller CRM company to watch. 

Market cap: $18.86 billion

Zendesk

Zendesk is known for its customer service software, but it also offers sales software and a marketplace of customer engagement apps. Its software makes it easier to help customers across self-service options, connecting all the communication methods — like phone, chat, messaging, and email — in one platform. 

Nucleus Research's Elman said he already sees Zendesk in competition with Salesforce for deals so he expects that competition to only get more intense as Zendesk grows. More often now, CRMs are expanding to include that "customer experience distinction," he said.

Zendesk was founded in 2007 and went public in 2014. 

Market cap: $16.7 billion

Zoho

Zoho is an Indian software company that provides tools for finance, productivity, collaboration, and more, with its sales, services, and marketing tools integrating with its entire product portfolio. 

Zoho's CRM offering is more developed than most companies of its size, said Nucleus Research's Elman, so it could likely compete with Salesforce more effectively than others.

Earlier this year Zoho released tools to help businesses reopen safely, similar to Salesforce's Work.com tools. 

The company was founded in 1996 in Pleasanton, CA but its global headquarters are in Chennai, India. It has remained private and claims that it never took outside funding. 

Total funding raised: N/A

Valuation: Unknown

Glia

Glia is a customer service platform that allows businesses to connect with customers using messaging, video, and other online avenues. The software is intended to make it simple for customers to learn about a product, purchase it, and access customer service, too. Sellers can interact with interested parties in real-time to try to convert them into paying customers. 

Glia's customers include several big banking organizations, said Gartner's Manusama, making it a firm to watch.

Total funding raised: $28.75 million

Valuation: $68.5 million

Conversica

Conversica is an AI-driven platform to help salespeople connect with potential customers and sign them on. It uses chat bots to automatically start conversations with potential buyers over email, text, or social media to schedule sales meetings or gauge interest, and it can also collect overdue payments from existing customers, too. 

Its customers include Oracle, Beck & Masten, and Talend, and it also has partnerships with Salesforce, Hupspot, and Marketo. Gartner's Manusama recommended it. 

Total funding raised: $106.8 million

Valuation: Unknown

GetAccept

GetAccept is a sales enablement platform that aims to digitize the sales process from the first conversation to a signed contract. The software includes features like video, live chat, sales content, proposal design, document tracking, and e-signatures to simplify the sales process. It also allows sales reps to track their pipeline.

Bessemer's Ferrara likens it to digitizing the deal room where sales contracts get discussed and signed. His firm led GetAccept's $20 million Series B round in early December.  

Total funding raised: $30.6 million

Valuation: $36.88 million before its Series B, current unknown

Insightly

Insightly is a project management-based tool for keeping track of customer interactions. The platform helps companies manage their customer contacts, tasks, and projects on desktop and mobile, and also offers a marketing automation tool. Its tools integrate with Google Apps and GSuite, Microsoft 365, and Quickbooks.

Insightly was founded in 2009 and is backed by Emergence Capital Partners, Cloud Apps Capital Partners, Scott Bommer, and Sozo Ventures. Bessemer's Ferrara named Insightly as a CRM startup to watch, though his firm has not invested.

Total funding raised: $40 million

Valuation: $220.67 million

Copper CRM

Copper is a CRM system designed to be used with GSuite and Google Apps. It helps salespeople identify, track, and optimize sales. The integration with GSuite allows users to update opportunities, add contacts, get account histories, and manage the pipeline directly from their Gmail inbox. It also automatically scrapes data from Gmail to automate recurring tasks. 

The company was founded in 2011 and has CRM products tailored for the tech industry, real estate firms, consulting companies, and small businesses.

Ferrara recommended Copper, though Bessemer has not invested in it.

Total funding raised: $108.12 million

Valuation: $77.68 million as of its Series B in 2016, current unknown

Affinity

Affinity is a CRM startup that's focused on managing relationships as opposed to simply serving as a database of contacts. Its scans the email and calendars of its workers in customer-facing roles to map out how people are connect and suggest ways to leverage existing relationships to secure new relationships and deals.

Bessemer's Ferrara said his firm is a customer of Affinity and has seen first-hand the value it can bring to organizations. It has products tailored towards the real estate industry, venture capital firms, and financial institutions. 

Total funding raised: $40.5 million

Valuation: $96.5 million

Nimble

Nimble is another CRM platform that integrates with productivity suites from Microsoft and Google. It allows users to access their CRM while working in their email inbox or websites like LinkedIn.

Its differentiator is a "focus on mining social media," said Nucleus Research's Elman. "It can link your records with social media, so it gives you more up-to-date info on when your contacts are active and what they're thinking about." 

Nimble is part of the Microsoft Accelerator. 

Total funding raised: $15.5 million

Valuation: $34 million

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