11x — one of Europe’s most-hyped AI startups to emerge in recent times — is today announcing that it’s closed a $24m Series A round. The investment was led by US VC Benchmark, with participation from Quiet Capital, SV Angel, Abstract Ventures, Lux Capital, Operator Partners, Visionaries, Activant, HubSpot Ventures, Project A, 20VC, 20Growth, and 20Sales.
Japanese investment giant SoftBank recently told Sifted that 11x was one of the continent’s AI startups that it’s watching closely, but the company just got a whole lot less European.
“The requirement from almost all of our investors was actually to relocate to the Bay Area,” says the company’s head of growth Keith Fearon. “We needed to move here.
11x, which was founded by Hasan Sukkar in London in 2022, will now move its headquarters from to San Francisco, where the bulk of its workforce will now be based. The company is relocating its engineers to the Bay Area, and will be making its new hires there too.
“The UK will be more of a satellite office for things like sales,” Fearon adds, saying that it makes a lot of sense for the company on a business level.
“The engineering talent is just over here […] there’s just so much more VC money in the US than any term sheet you get here, they’re going to give you two or three times the valuation of what a European VC will give you,” says Fearon, adding that around 70-80% of the company’s customers are US-based.
“Doing the work of 11 humans”
11x develops “digital workers” — AI-powered tools that do the job of sales development representatives (SDRs), as well as some customer support functions.
The company now has two of these “workers”: Alice, which communicates via text, and Jordan, a newer one which uses voice technology. 11x says that these tools — which can automatically reach out to potential clients to develop sales leads, as well as handle inbound sales requests — can outperform 11 humans doing the same work.
Fearon says that powerful AI models can create well-researched and personalised sales messages to a level that time-stretched SDRs don’t have capacity to do.
“Are they going online, researching people, finding their problems and sending one-off personalised messages based on their issues? Very few of them are,” he argues. “What they really do is they just make a generic email and email as many people as possible, and it’s a very bad and poor experience for the buyer.”
The pitch appears to be working. The company serves 200 customers, including recognisable names like Otter.AI, Airwallex and Datastax. Fearon tells Sifted that the company has multiplied its revenues 5x this year, and that it had achieved what few startups manage at such an early stage — cash flow positivity.
With the new investment, 11x says it will be investing heavily and R&D and will become loss-making again as it makes senior product and engineering hires, but Fearon says the company could return to cash flow positive “at any point.”
He adds that the company has managed to cut customer churn by roughly a half.
“That’s down to three things: focusing more closely on who our ideal customer is, dramatically improving the product and then really focusing on the service side of SaaS,” says Fearon.
Companies of the future
This final point appears to be a big part of 11x’s growth strategy for the future, as it attempts to redefine how a modern sales team works, by offering a fully integrated system that can plug right into a client’s tech stack.
“When companies get past 1,000 employees, they start having all of these people to manage internal systems, sales operations, sales enablement, all of this. And there can be hundreds of them,” Fearon says.
“Let’s say you want to make a change in your CRM or launch a marketing campaign, it takes about six weeks because you’ve got to coordinate all of the different siloed information. Our system, which we’ve already built the shared infrastructure for, integrates with all your existing tools.”
11x is operating in a crowded field, with other well-financed companies like Artisan, Luna AI and Solda AI all offering AI-powered sales tools. Meanwhile, some commentators are questioning whether automating cold outreach is a promising strategy, as the sales industry is moving away from this method of generating business.
Fearon says that 11x won’t stop at automating sales functions, but argues that the demand for the company’s digital workers speaks for itself.
“The reason we started with go-to-market is that it makes people money instantly. Everyone wants to buy something that not only saves cost, but also makes them money. So the ROI is right there. It’s so easy to prove,” he says.
Read the orginal article: https://sifted.eu/articles/11x-series-a/
