Tackle.io, an Idaho-based startup that helps software companies sell through cloud marketplaces such as AWS's, announced today it has raised a $100 million Series C funding round. Co-led by Coatue and Andreessen Horowitz, the round also saw participation from Bessemer Venture Partners.
Bringing Tackle's total funding to $148 million, the Series C turned Tackle into a unicorn with a $1.25 billion valuation. A document sent to the press describes this figure as "a significant uplift" from its $35 million Series B, whose valuation wasn't disclosed when it took place a mere nine months ago.
Tackle says it plans to use its new funding to accelerate the execution of its product roadmap, scale its go-to-market (GTM) teams, expand its global reach and continue to innovate. That's quite a list; with $100 million it may be possible.
But because the list sounds a bit vague to us, let's dive deeper into what Tackle is tackling.
As often happens, the company started with entrepreneurs scratching their own itch, my colleague Ron Miller reported last March. Tackle's co-founder and CTO "Dillon Woods says that at previous jobs, he found that it took several months with a couple of engineers dedicated to the task to get a product onto the AWS marketplace, and he noticed that it was a similar set of tasks each time."
Tackle solved that by coming up with a solution for independent software vendors (ISVs) to list onto major cloud marketplaces: those of Amazon's AWS, Microsoft's Azure, Google Cloud Platform and IBM-owned Red Hat.
You might not have realized it yet, but "cloud marketplaces aren’t just one more channel for selling software -- it’s becoming the channel," a16z's Martin Casado wrote last March. The investor joined Tackle's board when his firm led the startup's Series B round, and sees it as a category leader. "Tackle is the leading player for enabling companies to sell software through the cloud," he said.
At the time, Casado referred to Tackle having more than 200 customers. That number has now grown to 350, according to the company. This includes companies such as AppDynamics, Auth0, CrowdStrike, Dell, GitLab, HashiCorp, Looker, McAfee, NewRelic, Okta, PagerDuty, Talend and VMware, it says.
The clients range from startups -- most of them -- to corporations, but they have one thing in common: They make software. So why would they use a "zero engineering" solution to build and maintain marketplace integrations? According to Tackle, it's because "software companies shouldn’t have to build software in order to sell software" -- their human resources are better used elsewhere.
Says Tackle customer Robson Grieve, CMO at low-code platform OutSystems: "The Tackle Platform makes leveraging Marketplaces a business decision versus a distraction to product and engineering teams."
This business decision -- selling via cloud marketplaces -- is increasingly common.
In its State of the Cloud 2021 report, Bessemer highlighted the adoption of cloud marketplaces as one of the top three best practices for companies to implement for GTM in the New Normal. The VC firm has backed Tackle since its seed round, and led its $7.25 million Series A round in 2020, with partner Michael Droesch joining the startup's board at that time.
Fellow VC firm Battery Ventures, which to our knowledge hasn't invested in Tackle, also backs up that view. In its State of the Open Cloud 2020 report, it had listed "leverag[ing]" new cloud marketplaces to discover and reach customers as an operational best practice.
In its own State of the Cloud Marketplaces Report, Tackle heard from 67% of survey respondents that they planned to invest more in marketplaces as a go-to-market avenue in 2022. The report also predicts that cloud marketplaces will exceed $10 billion in throughput by the end of 2023, and $50 billion by the end of 2025.
There are several drivers behind the rise of cloud marketplaces, but the gist is that B2B sales increasingly look like B2C sales -- which is why investors are betting on Tackle. "We believe Tackle is well-positioned to help all sellers accelerate their shift toward cloud marketplaces and digital selling," said Coatue general partner David Schneider, who will join Tackle’s board as an observer following the round.
Of course, we'd like to know more about Tackle's revenue, but it is only saying that it doubled its ARR in 2021. "This has been a tremendous year for Tackle," said CEO John Jahnke, as the company now "expects to see explosive growth" in 2022.
One thing that will grow for sure is its team: It increased from 56 to 160 employees this year, and the startup is planning to double its headcount in 2022.