Listen Labs abandons $125M funding round amid Salesforce acquisition talks

Key facts

• Listen Labs, an AI research startup, abandoned a $125 million funding round.
• The abandoned funding round valued Listen Labs at $1.5 billion.
• Salesforce is in talks to acquire Listen Labs for approximately $2 billion.
• Listen Labs has annualized revenue of about $30 million.
• Simile, a competitor, announced a $200 million Series B at a $2 billion valuation in late July.
• Listen Labs was previously valued at $500 million after a $69 million Series B round in January.

Listen Labs, a startup specializing in AI-driven customer research, has reportedly withdrawn from a signed term sheet for a $125 million Series C funding round that would have valued the company at $1.5 billion. Menlo Ventures was expected to lead the round.

The decision to abandon the financing is likely due to ongoing acquisition talks with Salesforce, the customer relationship management giant. Business Insider reported that Salesforce is considering acquiring Listen Labs for approximately $2 billion, though the discussions are not finalized and a deal may not materialize.

Listen Labs, founded in 2023, uses AI to automate customer interviews and generate research reports, aiming to reduce the time and cost associated with traditional market research. The company has reported annualized revenue of about $30 million, roughly three times that of its competitor Simile. Simile recently announced a $200 million Series B round at a $2 billion valuation, potentially setting a new benchmark for companies in the space.

If the Salesforce acquisition talks fail, venture capitalists anticipate Listen Labs will seek a valuation of $2 billion or higher in the public market. However, some experts suggest that Salesforce might find the potential 67 times revenue multiple too high for an acquisition.

Listen Labs was co-founded by Florian Jüngermann and Alfred Wahlforss. Its technology is used by companies such as Microsoft, Canva, Anthropic, and Sweetgreen. Other competitors in the AI customer research market include Outset, Keplar, and Aaru.