G2 Will Break $100m ARR This Year, not from reviews. Guess their 2 new lines of business
Summary
TLDRIn this insightful interview, CEO Godard Abel discusses the success of G2, a review platform that reached a $100 million revenue milestone and a $1.1 billion valuation in 2021. With over 100,000 software products listed across 2,000 categories, G2's dynamic taxonomy is key to its growth. The spotlight is on G2 Track, a new product aimed at helping businesses manage their SaaS and cloud expenses efficiently, especially during economic downturns. With a strong community of vendors and a dedicated research team, G2 continues to innovate and expand its offerings.
Takeaways
- 🚀 G2 is a review website turned into a $100 million business, founded by CEO Godard Abel in 2012.
- 📈 G2 reached $100 million in revenue in the previous year, achieved a $1.1 billion valuation in 2021, and has raised a total of $240 million to date.
- 👥 The company has a team of over 936 full-time employees.
- 📊 G2 has 2,000 software categories and lists over 100,000 software products, with a 48% growth in listings over the past 12 months.
- 💡 G2's new product, G2 Track, helps CIOs and CFOs track their SaaS and Cloud spend, which is particularly relevant during economic downturns.
- 🔗 G2 Track works by API, integrating with financial systems like NetSuite and QuickBooks to analyze spending and usage data against the G2 database for insights.
- 💼 G2 Track offers both free and paid versions, with the paid version providing additional features such as API integration with enterprise systems and contract conversion services.
- 🔑 The success of G2 Track relies on convincing founders and CFOs to connect their data, leveraging the extensive database of G2.com.
- 🌐 G2's dynamic taxonomy of over 100,000 SaaS products listed in 2,000 categories is a key asset for G2 Track and a challenge for CIOs and CFOs to manage.
- 📈 G2 is expected to break through the $100 million ARR mark by the end of the year, a significant milestone in the SaaS industry.
- 🌟 G2's taxonomy is so valuable that it's licensed to partners like ServiceNow and is used by some of the world's leading SaaS investors for market analysis.
Q & A
What is G2 and what does it specialize in?
-G2 is a leading business software review website and marketplace, co-founded by Godard Abel in 2012. It specializes in providing software reviews and has expanded to offer a product called G2 Track, which helps businesses track their SaaS and cloud spend.
What significant milestones has G2 achieved in terms of revenue and valuation?
-G2 achieved $100 million in revenue in the previous year, broke a $1.1 billion valuation in 2021, and has raised a total of $240 million to date.
How many full-time team members does G2 have?
-G2 has over 936 full-time team members.
What is the significance of the number 2,000 in G2's context?
-There are 2,000 software categories on G2, which indicates the breadth of the software market they cover.
How many software products are listed on G2 and what was the growth rate over the past 12 months?
-Over 100,000 software products are listed across categories on G2, with a 48% growth in listings over the past 12 months.
What is G2 Track and how does it benefit businesses?
-G2 Track is a product that helps CIOs and CFOs track all of their SaaS and Cloud spend in real time. It provides data benchmarks and helps companies identify areas where they can save money or fill gaps in their tech stack.
How does G2 Track differ from other expense management tools?
-G2 Track focuses on providing data benchmarks and operates through API integration with financial systems. It differs by offering insights based on the G2 database, helping companies assess their tech stack and spending more effectively.
What is the business model for G2 Track?
-G2 Track operates on a SaaS subscription model, with a free version for startups and a paid version that offers additional features and API integrations for enterprise systems.
What additional services does the paid version of G2 Track offer?
-The paid version of G2 Track offers API integrations with more enterprise systems like NetSuite and OCTA, as well as a contract conversion service to help companies manage key contract terms proactively.
How does G2 ensure accurate taxonomization of the thousands of software companies listed on their platform?
-G2 works actively with software vendors to ensure proper classification across categories. They have a research team of about 50 people who collaborate with vendors and continuously update the taxonomy to reflect new products and categories.
What is the significance of G2's dynamic taxonomy for both vendors and investors?
-G2's dynamic taxonomy is an essential tool for software vendors to ensure they are discoverable by potential buyers and for investors to make sense of the market, understand competitors, and identify adjacent markets.
How does G2 plan to achieve its goal of breaking the $100 million ARR mark?
-G2 is growing well and is confident about reaching the $100 million ARR mark by the end of the year, supported by the expansion of their product offerings like G2 Track and the continuous growth of their platform.
Outlines
🚀 G2's Success Story and Product Expansion
This paragraph introduces the remarkable success of G2, a review website launched by CEO Godard Able in 2012. It highlights the company's impressive milestones: reaching $100 million in revenue, a $1.1 billion valuation, and securing $240 million in funding. The team has grown to over 936 full-time employees. The usage statistics of the platform are equally impressive, with 2,000 software categories and 100,000 products listed, showing a 48% growth in listings over the past year. The speaker, Nathan Ladka, shares his background and introduces the interview with Godard, discussing G2's role as a leading business software review website and marketplace. Godard hints at new product developments, particularly 'G2 Track,' aimed at helping businesses manage their SaaS and cloud spend.
📊 G2 Track: A Tool for SaaS Spend Management
The second paragraph delves into the details of G2 Track, a new product designed to assist CIOs and CFOs in tracking and managing their SaaS and cloud expenses. It is particularly relevant during economic downturns, helping companies identify waste and gaps in their tech stack. G2 Track works by integrating with financial systems via API, analyzing spend data, and benchmarking it against the G2 database to provide actionable insights. The discussion covers the product's free and paid versions, with the paid version offering additional features like API integration with enterprise systems and a contract conversion service. The goal is to provide full visibility and proactive management of the SaaS and cloud service stack.
🌐 G2's Dynamic Taxonomy and Its Impact on the Industry
The final paragraph focuses on G2's dynamic taxonomy system, which is a key asset for the company and its users. It explains how software vendors actively engage with G2 to ensure their products are accurately categorized across various software categories. The taxonomy system is not only crucial for G2's own offerings but also for external partners like ServiceNow, which licenses the taxonomy for its IT Asset Management tool. Additionally, G2's taxonomy is being utilized by some of the world's leading SaaS investors to analyze market trends and competition. The paragraph concludes with Godard expressing excitement about the growth of G2, its recent achievements, and the potential of G2 Track in the current economic climate.
Mindmap
Keywords
💡G2
💡Revenue
💡Valuation
💡G2 Track
💡API
💡Taxonomy
💡SaaS
💡Marketplace
💡Entrepreneurship
💡Investment
💡Economic Downturn
Highlights
G2, a review website launched in 2012 by CEO Godard Abel, reached $100 million in revenue in the previous year.
G2 achieved a valuation of over $1.1 billion in 2021 and has raised a total of $240 million to date.
The company has over 936 full-time team members.
G2 lists over 100,000 software products across 2,000 categories with a 48% growth in listings over the past year.
Nathan Latka, author and founder of FounderPath.com, has invested in over 400 software founders totaling $150 million.
G2's new product, G2 Track, helps CIOs and CFOs track SaaS and cloud spend, especially relevant during economic downturns.
G2 Track uses API integration with financial systems to provide data benchmarks and identify cost-saving opportunities.
G2 Track differentiates itself from vendors by focusing on data provision rather than contract negotiation services.
G2's dynamic taxonomy of over 100,000 SaaS products is a key asset for G2 Track's data-driven stack assessments.
G2 Track's smart recommendations are dependent on the connection of financial data by founders and CFOs.
G2 Track is offered in both free and paid versions, with the paid version offering additional enterprise system APIs and contract conversion services.
G2 aims to help companies manage their SaaS and cloud service stack proactively, avoiding surprises in contract terms and costs.
G2's taxonomy and review data are licensed to partners like ServiceNow for categorizing apps and aiding investor data solutions.
G2's community of vendors actively works with the platform to ensure proper classification and innovation in categories.
G2's listings have grown by 48% in the last year, indicating a strong synergy between vendors and the platform.
Godard Abel is optimistic about G2 breaking through the $100 million ARR mark by the end of this year.
G2's success is attributed to its ability to accurately taxonomize software companies and its collaborative relationship with vendors.
Transcripts
this is wild I bet you had no idea you
could build a$ hundred million business
for a review website that's right a
review website that's exactly what CEO
Godard able did when he launched G2 in
2012 here are three numbers you need to
know number one they hit a 100 million
bucks in Revenue last year number two
they broke a $1.1 billion valuation in
2021 and have raised 240 million to date
and number three there's over 936 folks
full-time on their team what about usage
how many actually use the site here are
three numbers you need to know there's
2,000 software categories on G2 there's
over 100,000 software products listed
across those categories and listings
growth was 48% over the past 12 months
if you want to see how godart has done
this and it's not his first time he's
done this many times you'll want his
Playbook let's jump into his $100
million Playbook right now hey folks if
we haven't met yet my name is Nathan
ladka I launched and sold my first
software company back in 2015 and went
on to write a book about it which you
guys made a Wall Street Journal
bestseller purchasing over 30,000 copies
thank you so much for that after the
book I launched this show and went went
on to create founder path.com I raised a
large fund to do non-dilutive deals with
B2B software Founders so far we've
invested in over 400 software Founders
totaling $150 million here in 2024 we're
doing three to four New Deals per week
so if you're looking for Capital and
don't want to give up Equity go sign up
at founder path.com for free to get your
offer all right let's jump into the
interview hey folks my guest today is
Godard able he's a CEO of G2 which I'm
sure many of you guys have seen you've
seen the badges flying around LinkedIn
everyone wants to be top ranked on G2
that's because it's the leading business
software review website and Marketplace
which he co-founded in 2012 Godard you
ready to take us to the top yes let's go
Nathan so this is not your first rodeo
uh you you gave a really great talk at
our last founder event where you
summarize some of the other companies
you've built are are you having as much
fun building this one as the last three
or
four yeah but I would love
entrepreneurship it's always different
but I am enjoying the new challenges I
love that so let's talk a little bit
about product we had you on recently um
obviously most people think about G2 as
a review site right how do you think
about product expansion what's next yeah
I think one of our exciting new products
is G2 track and G2 track is all about
helping cios CFOs track all of their
SASS and Cloud spend and we think it's
especially relevant now a bit of an
economic downturn so everyone's trying
to also figure out am I wasting money on
some of my SAS are there gaps in my tech
stack and with G2 track we can help
companies figure that out in real time
and so how should folks think about G2
track relative to you know vendors of
the world and other other sort of
expense management tools yeah and we do
partner with vendor and I think vendor
they're really good at negotiating SAS
contracts and they're more full service
G2 track is really about giving you data
benchmarks and it work works by API we
hook it up to your financial system
let's say you're running netw Suite
intch QuickBooks we parse all your spend
data look at your usage if you're using
something like OCTA and then Benchmark
it against the whole G2 database to help
you figure out are you have some
duplicative apps you know areas you can
save money and on the other side are
there gaps in your stack you know where
there's new products we'd recommend so I
think we're really excited about the
potential of track and I guess your
ability to make smart recommendations
there is directly dependent on your
ability to convince found and CFOs to
actually connect the data so you sort of
have a bit of a Marketplace problem
there but you are the marketplace King
You've solved this with reviews how do
you think about figuring out that sort
of connection equation and making sure
you have a big database to make smart
recommendations based off of right and
the good thing for us it's the same
database you know the poers g2.com
because on g2.com we have over 100,000
SAS software products listed we
categorize them in over 2,000 categories
but it's a very Dynamic taxonomy and
frankly that's one of the key assets for
track and that's one of the challeng
Alles for C CFOs you know a lot of
companies are running hundreds if not
thousands of apps and frankly if you're
the CIO CFO you don't even know what
they do you because marketing buys its
own apps sales buys its own apps product
buys its own apps and you know you just
see other spend but they have no idea
what they do so having that taxonomy
being able to match products and then
even using the review data seeing what
businesses like yours are having success
with on g2.com based on that feedback is
actually essential we think to making
very datadriven stack assess ments and
so that's why we see the two very
synergistic and also going the other way
track can also help inform insights we
provide on g2.com because it gives us a
deeper look into you know what companies
are spending on how that's trending
where they're actually having success
and so that's why we see it you know
being very synergistic to what we're
already building on g2.com so you
mentioned over 100,000 software
companies on G2 the value of the
taxonomy the dynamic taxonomy you've
built and how that feeds into track how
many people you know have connected
realtime API feeds you know into track
today yeah and I think we have you know
it's a few hundred companies and we have
both a free in a paid version we have
about 100 on the paid version now which
is I think a big milestone because in
some ways you know track is a sass
startup within the greater G2 but
obviously fully built into the data and
the architecture but we're we're excited
and we do think second half of this year
we'll see a lot of momentum with that
product because I think everyone is
trying to you know figure out where to
save a bit of money to you know so
better WEA the uh the economic downturn
you said 100 on the paid version of
track what does paid mean how do you
make money on this product well I think
it's a sass subscription like any
product you know but with paid there's
additional features and especially I
think if you want apis to more
Enterprise systems like netw Suite like
OCTA that's when you go to the the paid
version of track but if you're running
QuickBooks if you're a startup you can
try it for free I see so if there's a
large Enterprise with 50 million bucks
in Revenue that wants to use track to
manage their spend and they also use
OCTA when they click connect to OCTA you
might say wait you need an Enterprise
plan here's a $300 a month fee to sort
of access that true and the other thing
we do for the bigger companies is we
have a contract coner service because to
really make track work well you also
want to track the key contract terms you
know such as renewal
dates uh you know whatever kind of price
uplift there might be and frankly there
isn't a great way to get all that data
into a system you know without doing
some contract entry so we have a
contract coner service that's also part
of our paid solution and that can really
help companies and be more proactive in
managing their whole SAS and cloud
service stack some of the fastest
growing SAS companies say well just sign
threeyear contracts and they build in
you called it price uplift but it's
effectively a natural accelerant each
year where the value of the or the ACV
increases whatever 5% you're you're on
the flip side trying to prevent your
customers from paying more for something
like Salesforce for example what are you
seeing right go ahead yeah I just say
we're on both sides of that we just want
people to be aware you know I think and
I'm also an entrepreneur right I think
that's key for a SAS seller if you want
to do that you have to provide more
value each year and obviously I think
some vendors do a great job of that
right but if you're not providing
upgrades more value each year then yes
than the buyers your customers will
question that hard and for the buyers we
just want them to be aware you know and
and have that visibility because
sometimes there are surprises right and
then nobody's looked at the contract and
turns out there's like a 90day opt out
and if you don't there's whatever uplift
there is and I think that's all fine as
long as you're aware of it as long as
you feel like you're getting enough
value but obviously CIO CFOs don't want
to be surprised and that's you know
track make sure that they have full
visibility and they can be proactive
Godard when you look at the the
ecosystem of folks that are helping SAS
companies track their spend who right
now do you feel like has the most data
the most live connections to SAS
companies yeah uh and honestly I'm not
sure I do think in terms of the
negotiating
uh you know really I think vendor
obviously has great momentum right they
just raise a bunch more money and uh you
know so uh but I I think in terms of
actually Gathering data you know we feel
like we're we're in a good position now
you're also well capitalized I believe
your last round was 157 million series D
last year right true and broke the 1.1
million billion sorry valuation Mark yes
that was very exciting any more Capital
race since then or no no and we don't I
don't think would be great 10 raise
Capital yeah although I think we're also
lucky I don't think we raised at like
some crazy crazy multiple well you told
us I mean you told us right around there
you're breaking like a 55 is million run
rate so that was a 19x is multiple right
if that's accurate I'd say that's a fair
multiple not crazy yeah no and we we are
growing well you I think this year we'll
definitely break through 100 million ARR
so oh wow yeah goar that's a big that's
a big announcement that's exciting I
mean how I mean are we like is is that a
stretch FL or you feel pretty good about
that no I think well I feel good at
definitely getting there by year end and
certainly when we do hit it you know
we'll we'll share that with you because
it will be that's exciting and I think
in a lot of ways and I probably agree in
a lot of ways it's more exciting
becoming unicorn at least last year
because last year becoming unicorn was
probably easier and uh you know then
breaking through 100 million AR as you
know not that many SAS vendors hit that
Milestone so y it's rare excited to get
there I mean that means right now you've
got to be somewhere between like sort of
808 5 million in AR right I'm not going
to confirm that but we will get through
100 this year all right fair enough very
cool last question I want to ask about
before we wrap up I would argue one of
your biggest assets is is your ability
to accurately taxonomize hundreds of
thousands of software companies how on
Earth do you do this well I think we
have the advantage that vendors you know
software vendors software sellers they
want it to be write on G2 and as you
know our models so if you're a sess
entrepreneur you can list on G2 for free
and then we also ask you what category
you're in and then obviously as vendors
grow like our friend Henry at Zoom info
right obviously they grow well beyond
one product one category so now Zoom
info something like that's probably in
30 categories but we actively work with
their product marketing their product
teams to make sure they're properly
classified across all their products and
that's never done because vendors like
Zoom info always innovating entering new
categories launching new products but I
do think we've become an essential part
now of our industry you know where if
you're a software vendor you want to be
right on G2 so that software buyers and
we have about 7even million a month
coming to G2 they discover you you know
because you don't want to be missed and
so that's why there's a nice Synergy you
know with our community of vendors and
uh and also I think more entrepreneurs I
think the number of listings on GT has
grown 48% over the last year that's wow
and so that's very exciting and but it's
very collaborative you know with our
community of vendors and they're always
helping us updated and and we do have a
research team I it's a pretty big job
and we have about 50 people in our
research team always working with the
vendors because not only do we
categorize them but then we come up with
different questions you know to figure
out what are the key features in each of
those categories for each of those
products so we also can ask the users
the right questions about you know how
well those products are working for them
so that's but I agree it's a big asset
and that's also spawned a new business
for us where we do license our taxonomy
to Partners ah one of them for example
is service now and service now I think
as you know leading it platform Cloud
company and but they also have an it
Asset Management tool and you know to
help them categorize all their apps they
now use the G2 taxonomy and it's also
something investors are now licensing
you know we have an investor Data
Solutions business at G2 also very
exciting about 50 of the world's leading
SAS investors now also using G2 data and
the taxonomy also helps them just to try
to make sense oh who are the competitors
for this you know deal what are adjacent
markets and uh so I think it is an
exciting asset you know very Dynamic
asset that we keep building guys
exciting times at G2 again broke the
Unicorn Mark last year and caught 55 is
million Revenue Godard Fields good about
breaking the $100 million mark this year
also breaking into new lines of business
he sounds like most excited about G2
track which helps you understand and
manage your SAS expenses which is
especially important in a downturn like
we're going through now where everyone
wants to save cash flow ideally get
profitable and back to break even
increased Runway Godard G2 thanks for
cheing us to the top yeah thanks Nathan
great to see you
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