Listen Labs withdrew from a Series C funding round for which it had signed a term sheet with Menlo Ventures, according to people familiar with the deal who spoke to TechCrunch. The round was intended to raise $125 million at a valuation of $1.5 billion, but it had not closed when the company withdrew from the term sheet, a relatively rare move in the venture capital market.
According to the source, the collapse of the round is linked to acquisition talks Salesforce is holding to buy Listen Labs for approximately $2 billion. Business Insider reported that the negotiations remain preliminary and may not result in an agreement, meaning that neither new funding nor an acquisition has been confirmed so far. Listen Labs, Salesforce, Menlo Ventures and Simile did not respond to TechCrunch’s requests for comment.
A Customer Research Startup
Listen Labs develops tools that use artificial intelligence to prepare survey questions and conduct customer interviews by voice or video, then turn the conversations into reports and PowerPoint presentations resembling the output typically produced by human market researchers. The source says this approach reduces the time and cost associated with traditional market research and helps companies understand customer reactions to product changes more quickly.
The company was founded in 2023 by Florian Jüngermann, a former German national champion in competitive programming, and Alfred Wahlforss, the former founder of recruiting company Bemlo. Its annualized revenue is approximately $30 million, according to the source, roughly three times Simile’s revenue, according to people familiar with the financial situation of both companies. Listen Labs’ customers include Microsoft, Canva, Anthropic and Sweetgreen.
Valuations Accelerate in the Sector
Listen Labs announced in late January a $69 million Series B round at a $500 million valuation, led by Ribbit Capital with participation from Sequoia, Conviction and Pear VC. In late July, Simile announced a $200 million Series B round at a $2 billion valuation led by Greenoaks, which may have established a new benchmark for Listen Labs’ valuation.
The two companies compete in a market that also includes Outset, Keplar and Aaru. While some platforms rely on automating interviews with real people, other companies such as Aaru and Simile use synthetic models to simulate human behavior and predict responses without conducting actual interviews.
What Matters in Practice?
The actual development is Listen Labs’ shift from a funding path with agreed terms to the possibility of selling the company, not the closing of a new financial deal. The acquisition could give Salesforce technology that helps it predict the needs of customer relationship management systems’ users, but a person experienced in exit negotiations with Salesforce said that paying approximately $2 billion for a company generating $30 million in annual revenue implies a multiple of roughly 67 times, a level that could make the decision more difficult.
If the acquisition talks collapse, several investors who spoke to TechCrunch expect Listen Labs to return to the market seeking a valuation of $2 billion or more. But this remains an expectation among investors, not a confirmed plan from the company. The open questions therefore remain whether Salesforce will complete the deal and whether Listen Labs will succeed in justifying a higher valuation through a new funding round.