Ain’t no shame in the pivot game, especially not when looking beyond your first idea can pay off so handsomely. Yext CEO Howard Lerman sent out an email today announcing that his start-up just raised $10 million Series D round from led by its inside investors WGI Group, the investment vehicle run by entrepreneurs Michael Walrath, Jonah Goodhart, and Noah Goodhart. The internal round raises the company’s valuation higher than the $25 million valuation it got for its series C round two years ago.
But rather than use the funding to continue on building its initial premise–pay-per-call ads for local business–Mr. Lerman is thinking bigger toward what TechCrunch once called, “The Anti-Google Local Advertising Alliance.”
Since 2007, the company grew Yext Calls into 15 verticals that cover roughly 200,000 potential business locations around the country. It was enough to get Mr. Lerman interest from would-be buyers. But it wasn’t enough for Mr. Lerman:
In a company blog post, he wrote:
“Many entrepreneurs would be pleased with that outcome. But about a year ago, as we worked with dozens of local search partners and tens of thousands of local businesses, a much bigger and potentially more significant problem emerged – “The Listings Problem” – and we saw an opportunity to solve it. This problem involves not just 200,000 businesses, but 20,000,000 businesses in the US alone. So, in addition to growing Yext Calls, we decided to break ground on solving The Listings Problem, all while making sure our Calls business was sufficiently well-resourced to capitalize on its own opportunity, still very large in its own right.”
Et voila, new product called PowerListings that enables businesses to have a single entry point to correct info, post photos, offer specials, and analyze traffic on their listings. In the past 100 days, 4,000 paying customers have signed-up for PowerListings subscriptions, hence the rising blue bars in the handy graph at the top.
We’ll leave the question of whether sticking with his original, while still pursuing a new (more lucrative) one fits the technical definition of a “pivot” up to semantics experts. Mr. Lerman titled the post about his funding news, “Why Yext Pivoted to Business Listings” and that’s good enough for Betabeat. Besides, “reinventing” your start-up just sounds sexier than some run-of-the-mill new product announcement, doesn’t it?
