Clari is a sales technology provider that helps sales teams streamline operations and improve revenue predictability. Traditionally, it has stayed away from deeper revenue intelligence capabilities that focus on interaction execution, preferring to aggregate that information from other tools and present it in Clari. The Wingman acquisition is a shift away from this approach, as this is a conversation intelligence (CI) tool used to support and capture direct interactions between buyers and sellers.
Why would a company like Clari deviate from its strategy and acquire a frontline sales execution focused company like Wingman? In my view, there are four reasons why this acquisition makes sense for Clari.
- Adding CI eliminates a key dependency. Clari connects directly to calendar and email solutions, which account for 28% of buyer-seller interactions. With 45% of sales interactions happening through phone or web conferencing, Clari depended on integrations with other, third-party CI providers to capture and analyze this data. Adding CI capabilities to its portfolio reduces this dependence and allows Clari to connect directly to the interaction source.
- It allows for new insight generation capabilities. The foundation for CI is in natural language processing AI, which is used to derive insights from conversations. Since sales is all about conversations, this capability is needed to understand and derive sales insights. These capabilities apply to all types of conversations, which will also enhance all other insights already captured from other channels such as email and chat.
- Valuations have come back to earth. Six months ago, it was unlikely that this acquisition would have made financial sense. According to Crunchbase, global venture funding in May 2022 reached $39 billion, marking the first month in more than a year when funding dropped below $40 billion. The May figure is also well below the $70 billion peak that VC funding reached in November 2021. With funding drying up, this is the perfect time for late-stage market leaders with large war chests to acquire technology companies at a reasonable price.
- This new capability aligns with Clari’s stated strategy. As noted above, Clari is focused on helping its clients deliver predictable revenue growth. This acquisition is aligned with that goal and strengthens core capabilities. This may include unique use cases such as capturing and analyzing internal deal review calls, then using those insights to automatically update deal progress and commit status. This adds another data point for analysis when determining the most accurate forecast.
In my view, this acquisition brings a fresh approach to conversation intelligence, which will improve CI’s overall value to sales organizations. Clari and other companies in strong financial positions will continue to acquire and expand their capabilities. This is a good thing in a sales tech market that is fragmented into a wide range of solutions that have made it hard to understand what is and is not worth buying.