Business Planning

How Pigment Raised $65 Million Without a Pitch Deck

  • Pigment helps companies project financials under different macroeconomic scenarios.
  • Companies can use those predictions to help make decisions about headcount and more.
  • Pigment’s cofounder shared how the team raised $65 million in Series B funding without a pitch deck.

Eléonore Crespo, a cofounder of Pigment, is embracing the uncertain world.

“Whether you’re a tech company or a Fortune 500, everyone is asking themselves the same question right now, which is where are we going, and what if the world gets worse?” Crespo said.

Crespo said she believes that with uncertainty around the pandemic, inflation, and energy crises, companies need to be able to accurately forecast revenue and profits to help prepare for many macroeconomic scenarios.

She said that as an investor at the venture-capital firm Index Ventures, she saw startups struggle with decisions around spending in an uncertain environment. That inspired her to cofound Pigment, a startup based in France that recently raised $65 million in Series B funding from IVP and Meritech Capital.

The capital was an extension of a Series B round in late 2021. Though the company did not disclose its exact valuation, a representative told Insider that the round was raised at a higher valuation than the previous round.

Companies using Pigment upload data from several sources to predict revenue and financials. For instance, a financial analyst could use the number of salespeople, the number of deals they close in a year, and the dollar amount of those deals to help forecast total sales. Users can run projections through boom or bust scenarios that tweak sales or costs by various amounts to see how their financials could change. Pigment also produces metrics such as user retention or customer-acquisition costs that companies can use to measure performance.

Pigment — which competes against software companies like SAP, Oracle, Workday, and Anaplan — raised $73 million in Series B funding led by Greenoaks in November. Crespo told Insider that the company hadn’t been planning to raise additional funding but was contacted by IVP and Meritech, which had heard about Pigment from customers. Crespo took the opportunity to fill the startup’s coffers amid a market downturn.

Crespo acknowledged that her no-pitch-deck approach isn’t the norm, but she argued that a compelling pitch deck isn’t necessarily the key to a successful fundraising round. She said founders should focus on building deep relationships with investors early on, developing trust and giving founders a preview of how hands-on and helpful the investors will be. She said that belief carried over from her investing days.

“Sometimes you do an interview process for an exec for six months — why not do it with an investor?” Crespo said.

Crespo said that while some startups may raise minimal capital early on to avoid investor dilution and release a basic product they add features to over time, Pigment did the opposite: It invested in research and development using a hefty Series A round to create a more comprehensive platform, helping it gain traction with early customers.

Crespo said she believes that creating a product with strong market demand is increasingly important in an economic downturn where companies are looking to reduce the tech tools they use.

“At the end, this is what you want: You don’t care about the investor story, you want your customers to love your product,” Crespo said. “So it may be important to raise more before so that you can have more time to actually build something incredible.”

https://www.businessinsider.com/pigment-raise-without-pitch-deck-ivp-meritech-seriesb-venture-capital-2022-9

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