Listen Labs has abandoned a signed term sheet for a $125 million funding round that would have valued the voice-AI market research start-up at $1.5 billion, as it holds takeover discussions with Salesforce.
The Series C financing was due to be led by Menlo Ventures, according to people familiar with the matter. The round did not close after Listen Labs withdrew from the agreement, an unusual move in the venture capital industry.
The decision is understood to be linked to talks with Salesforce over a possible acquisition of the company for about $2 billion. The discussions, reported by Business Insider, have not been finalised and may not lead to a transaction.
Salesforce, the customer relationship management software giant, could use Listen Labs’ technology to help businesses anticipate customer requirements and assess reactions to products and brands. However, a person with experience of negotiating exits to Salesforce said the company may consider a proposed price equivalent to roughly 67 times Listen Labs’ annualised revenue too high.
Listen Labs is generating about $30 million in annualised revenue, according to two people familiar with its finances. That is approximately three times the figure reported for Simile, a rival start-up in the sector.
Simile announced a $200 million Series B in July at a $2 billion valuation. The deal, led by Greenoaks, may establish a new benchmark for Listen Labs, one person familiar with the companies said.
If the Salesforce negotiations fail, venture capital investors expect Listen Labs to return to the market seeking a valuation of at least $2 billion.
Listen Labs uses AI for customer interviews
Founded in 2023 by Florian Jüngermann and Alfred Wahlforss, Listen Labs develops survey questions and conducts customer interviews using audio and video. It then turns the conversations into reports and PowerPoint presentations similar to those produced by conventional market research agencies.
The company says its approach can reduce the cost and time involved in understanding customer needs, allowing businesses to respond more quickly to feedback on products and services. Its customers include Microsoft, Canva, Anthropic and Sweetgreen.
Traditional market research is widely used by large companies to measure customer satisfaction and test products, but projects involving human researchers can take weeks to complete. Other start-ups competing in the area include Outset, Keplar, Aaru and Simile.
Some of those businesses automate interviews with real people, while others use synthetic research models to simulate behaviour and predict responses without speaking to customers directly.
Listen Labs was previously valued at $500 million after raising a $69 million Series B in January. The funding was led by Ribbit Capital, with existing investors including Sequoia, Conviction and Pear VC also participating.
Listen Labs, Salesforce, Menlo Ventures and Simile did not immediately respond to requests for comment.
