Dealroom raises €6M Series A for its startup data, market intelligence service

European startup and venture capital data company Dealroom has raised a €6 million Series A, it told TechCrunch.

The company’s new capital comes nearly two years after it raised €2.75 million in early 2020. Its database competes with a number of rivals in North America, including PitchBook, CB Insights, and my former employer Crunchbase.

Beringea led the Series A, which also saw participation from Knight Venture Capital and Shoe Investments, firms that previously invested in the company. To better understand the round, TechCrunch put a number of questions to Dealroom founder and CEO Yoram Wijngaarde.

Dealroom’s business

The startup collects data on private-market companies through public scraping and partnerships. Then, the resulting data is cleaned and run through the company’s software to “uncover actionable predictions,” as Dealroom puts it.

So Dealroom is three linked parts: data collection, cleaning and synthesis.

You can see why it might want more capital to handle the sheer influx of funding events that are swamping the globe. Indeed, companies like Dealroom should be enjoying something akin to boom times themselves. Their core market remit, the private corporate landscape, is expanding quickly, and many participants in the startup game are flush. So, Dealroom has lots of work to do — and lots of folks to sell it to.

The company’s business makes money in a few ways, including providing an API for both business and government customers and selling access to its platform on a SaaS basis. The company also does customer research. Per Wijngaarde, it has 50 government API customers that make up “about a third of [Dealroom] revenues.”

More generally, the company’s “revenue mix is roughly equally three parts between investors, B2B companies and governments,” according to the CEO. So, there isn’t a single leg on Dealroom’s revenue stool; three different groups are buying what it has on offer.

Returning to our point about it feeling like a strong moment for Dealroom and its global rivals — Crunchbase says that it will reach roughly $38 million ARR this year — the fact that governments are such a large portion of Dealroom’s revenue feels notable, and bullish. Governments are paying attention to the startup game as it spreads more evenly around the world, and are willing to spend to better understand their local market and, we presume, those around them.

On the capital front, TechCrunch asked Wijngaarde why his company raised just €6 million. In today’s market, that’s a modest round!

The CEO said Dealroom “sized” its new round around both “business needs” and the fact that it “didn’t want to get too far ahead of [itself] based on the availability of capital.” The founder added that Dealroom is also “fortunate to have strong growing revenue, coupled with healthy capital efficiency,” two things that would lower a near-term need for more capital, and therefore dilution.

What’s next?

Dealroom, Crunchbase and others in the data game are pretty good about data — having data, collecting data, you get the picture. What Dealroom wants to do with its data in the future is tinker with it more intelligently. When asked what’s ahead for his company, Wijngaarde said that it is “focused on expanding the predictive power of the platform, to help our clients discover promising companies at an ever earlier stage.”

If it can manage that, the company can add a zero to its pricing page, at least for investors. Mattermark, another company that I worked for, wanted to build something similar. It’s a big, hard problem, and one that will require oceans of accurate, to-the-minute data.

Before we go on too long, TechCrunch wanted to better understand a particular mechanic in the data collection business. So, we asked Dealroom if it counts data collection and curation as a cost of revenue or a marketing operating cost. Here’s what Wijngaarde wrote back:

We count data collection in part as cost of revenues and in part as product development in [operating expenses]. We also do a lot of human-led research, which is counted as cost of revenue, but also could be seen as cost of marketing, as this results in a lot of content marketing.

The answer is both, it turns out. I want to better understand that mix, and I am sure that we’ll get a better understanding when one of the companies in the private market data business files to go public.