By Rajwa Quasim
Salesforce, a cloud-based customer relationship management company, is reportedly in talks to acquire AI customer research startup Listen Labs for about $2 billion. The reported deal appears to have reshaped Listen Labs’ plans for a Series C funding round.
According to TechCrunch, Listen Labs had signed a term sheet for a $125 million Series C round at a $1.5 billion valuation. Menlo Ventures was expected to lead the funding round. However, the round never closed, and Listen Labs later walked away from the agreement, an unusual move in the venture capital industry. The decision was reportedly linked to acquisition talks with Salesforce.
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The deal has yet to be finalized. Salesforce shares fell about 1.9% Wednesday after news of the talks became public. If completed, the proposed $2 billion acquisition would give Listen Labs a higher valuation than the $1.5 billion valuation outlined in its Series C term sheet.
Listen Labs was founded by Florian Jüngermann and Alfred Wahlforss in 2023. The two met while studying at Harvard University.
The startup uses AI to conduct customer interviews through video and audio and help companies conduct market research. Its technology allows clients to quickly analyze customer feedback, which can otherwise be time-consuming to collect and process, particularly when companies need to interview large customer groups.
The company’s clients include Microsoft, Canva, Anthropic, Perplexity and Sweetgreen.
Listen Labs raised $69 million in Series B funding in January at a $500 million valuation. The round was led by Ribbit Capital, with Sequoia, Conviction and Pear VC participating as returning investors.
If the reported $2 billion acquisition goes through, Listen Labs would be valued at four times its $500 million valuation from its Series B round. The company generates about $30 million in annual revenue, meaning the acquisition price would value it at roughly 67 times its annualized revenue.
Salesforce could use Listen Labs’ technology to strengthen its customer offerings by giving businesses tools to gather and interpret customer feedback and make faster decisions based on that research. The acquisition could also reduce the appeal of standalone customer research tools by allowing businesses to access specialized AI capabilities within a broader platform.
Meanwhile, Salesforce rival Simile closed a $200 million Series B funding round in late July at a $2 billion valuation. Greenoaks led the round.
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Listen Labs could continue acquisition talks with Salesforce while retaining the option to return to the venture capital market and resume fundraising if the deal does not go through.
Salesforce recently acquired customer agent provider Finn in a deal worth $3.6 billion in mid-June. The company has also acquired Contentful, a platform that helps companies create and manage digital content, and m3ter, which helps businesses charge customers based on their usage.
Salesforce plans to use m3ter’s technology as part of its Agentforce Revenue Management offering. The company has also added Momentum and Cimulate to its acquisition portfolio.