Australian user research software firm Dovetail has announced that it has successfully raised $63 million in Series A funding led by Accel. To date, Dovetail has raised around $70 million, and with the new capital injection, the company’s valuation has crossed $700 million.
These numbers are a clear indication that this was not a typical Series A. In fact, it can be described as a late-stage investment made by Accel – the popular venture capital company. Accel has made a name for itself by investing large amounts of funds into tech companies that are either self-funded or managed to raise capital until they need a larger investment.
Dovetail’s journey – bootstrapping so far?
Dovetail’s CEO and co-founder Benjamin Humphrey has said that he founded Dovetail with an aim to build a company such as Basecamp and Buffer who have embraced the self-funded growth approach.
Although creating software for the user research market may not sound very niche, the company found traction and momentum in its initial days. It managed to expand to a team of six members with nearly half a million dollars in annual revenue on its own.
At that stage, a lot of venture capitalists were eyeing Dovetail, and soon after, the company raised AUD$5 million in 2019. Humphrey also said that one of their investors wanted to inject more capital into Dovetail toward the end of 2020. However, the company did not need money at that stage, which is why it raised a seed-1 round at a valuation of more than $100 million.
More about what Dovetail is selling
According to Dovetail’s most recent investors, the tech firm is designing a new category which they describe as a “system of record for user research”. Humphrey says that they are creating a productivity platform for researchers.
Just how engineers have GitHub and designers have Figma, Dovetail intends to create software for user researchers.
The software will enable end-users to collect feedback information from NPS surveys, video, text, and audio responses. These responses are tagged by teams, analyzed, and then shared across the company. The objective is to create a relational database for organizations where they can save their institutional knowledge and leverage this information to make faster decisions.
For example, an HR manager decides to part ways with a company, and another resource is appointed as a replacement. Typically, the resource will have to spend considerable time to understand how things work at the new company and thereby trigger a series of back and forth conversations.
This is where Dovetail’s product can help companies as they will have access to research data and knowledge
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