Listen Labs, a market research startup that uses voice AI to conduct customer interviews, recently signed a term sheet for a $125 million Series C at a $1.5 billion valuation, with Menlo Ventures set to lead the round, according to multiple people with knowledge of the matter.
But that round was never closed, the people said. Listen Labs moved away from the signed term sheet, something rare in the corporate world and generally frowned upon, according to venture capitalists.
The financing likely collapsed due to acquisition talks with Salesforce. The CRM giant has recently held talks to buy Listen Labs for around $2 billionBusiness Insider reported. However, the discussions have not been concluded and may not result in an agreement, the outlet notes.
Listen Labs is one of the leading startups in the rapidly growing field of automating customer research with AI. The three-year-old startup has about $30 million in annualized revenue, about three times more than Simile, a competing startup that predicts human behavior, according to two people familiar with the companies’ financials. In late July, Simile announced that it had closed a $200 million Series B at a sales price of $200 million.Valuation of 2 billion led by Greenoaks, likely setting a new valuation benchmark for Listen Labs, one person said.
If talks with Salesforce fail, several venture capitalists told TechCrunch they expect Listen Labs to return to the market and aim for a valuation of $2 billion or more.
While the acquisition of Listen Labs could strengthen Salesforce’s AI capabilities by using the startup’s AI to help predict customer needs, the CRM giant may ultimately decide that paying a 67x revenue multiple is too high a valuation, according to a person with experience negotiating exits to Salesforce.
Listen Labs, Salesforce, Menlo Ventures and Simile did not immediately respond to requests for comment.
Listen Labs was co-founded in 2023 by Florian Jüngermann, a former German national champion in competitive computer programming, and Alfred Wahlforss, who previously founded a staffing startup called Bemlo. The two met while pursuing master’s degrees at Harvard.
Listen Labs AI develops survey questions and interviews customers via audio or video. The resulting conversations are then packaged into reports and PowerPoint presentations, similar to those traditionally produced by human market researchers.
Fortune 500 companies rely on this type of research to measure customer needs and satisfaction with their brands and products, but traditional market research is expensive and can take weeks to complete.
Listen Labs technology helps reduce the time and cost of these projects, allowing companies to quickly understand how customers react to product changes and iterate on them more efficiently.
The startup’s clients include Microsoft, Canva, Anthropic and Sweetgreen. Listen Labs and Simile are not the only startups using AI to revolutionize the customer research market.
In addition to Simile, competitors in the space include Outset, Keplarand aaru. While some platforms automate interviews with real humans, other startups, such as Aaru and Simile, take a synthetic approach, using artificial intelligence to simulate human behavior and predict responses without interviewing anyone at all.
Listen Labs was previously valued at $500 million when it announced a $69 million Series B round in late January led by Ribbit Capital, with participation from returning backers Sequoia, Conviction and Pear VC.
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