Dovetail raises $87 million, as it follows in Atlassian’s footsteps for global growth

Aussie customer research startup Dovetail has closed a US$63 million ($86.9 million) funding round, giving it a whopping valuation of US$700 million, or $965 million.

The round is led by US VC firm Accel, and also includes funding from existing investors including Blackbird Ventures and Felicis Ventures.

Founded by ex-Atlassian co-workers Benjamin Humphrey and Bradley Ayers, Dovetail is designed to help teams analyse their customer research data, and gain better insights from it.

Founded in 2017, the business now has some 2,600 corporate customers, including the likes of Canva, Deloitte, Shopify and PwC and the founders’ former employer Atlassian.

It has also launched integrations with Zoom, Google Drive and Slack, and is preparing to integrate with Atlassian, too.

Over the past 12 months, Dovetail’s revenues have increased by 200%, and its headcount has doubled from 20 people to 65.

This is Dovetail’s largest raise to date, by a significant margin — the startup raised $5 million in August last year and $4 million in 2020.

Speaking to SmartCompany, Humphrey said the timing was right from a product point of view. The enterprise product is gaining traction, and a bit more cash will help the team support those new customers and create new features.

It also serves as what the founder calls “courage capital”, allowing the team to splash out on things like senior hires, new offices and expansion plans, without having to watch every cent.

It also felt like the right time to raise in terms of the startup economy, and the sheer amount of money in the ecosystem at the moment.

“From a leverage point of view … it just made sense to do a round and make the most of it.”

Almost an Aussie unicorn

While Dovetail is still a little way off the US$1 billion valuation of an official unicorn, at just five years old it is tantalisingly close to the AU$1 billion title of ‘larrikin unicorn’.

Blackbird Ventures partner Nick Crocker, who invested in Dovetail in the early days when it had a team of just three, said the startup’s growth has been “stunning to watch”.

“If Dovetail continues on its current customer and revenue growth trajectory, it can achieve Atlassian-scale success,” he said.

Humphrey is modest about this, saying he’s not one to make grand predictions. However he does agree that Dovetail “could be” the next international success story to come out of Australia.

“The market is certainly big enough,” he says.

“And I think the problem space we’re trying to solve for is really interesting and lucrative.”

There are also parallels between the two tech companies. Both are product led, capital efficient, B2B SaaS companies solving specific problems for specific teams. Both are also built out of Sydney and serve a global clientele.

Accel partner Rich Wong even led Atlassian’s Series A round, and continues to serve on the board of the business.

“Atlassian is a great company and obviously worth significantly more than we are, so we’ve got a lot of work to do there,” Humphrey laughs.

“But I think we’re probably on track.”