Costello, a local maker of sales-management software, has raised $2.1 million in seed money in its second fund-raising round, bringing the total its raised since its 2017 launch to $3.1 million.
But Costello founder and CEO Frank Dale, a former Compendium CEO, said he’s as excited about the quality of investors that came on board this round as he is about the amount the company raised.
Those investors include Omaha, Nebraska-based Dundee Ventures; Indianapolis-based Collina Ventures; Irena Goloschokin, a former chief strategist and local firm T2 Strategies; Denver-based GAN Ventures; Denver-based Stout Street Capital; and Palo Alto, California-based Social Capital.
Additional investors in this round of funding include Innovatemap Ventures, Elevate Ventures, Innovate Indiana and ExactTarget and ClusterTruck co-founder Chris Baggott. All are based in Indianapolis.
“It’s a pretty awesome list of investors,” Dale told IBJ. “All those names are names people would know locally … and nationally we added Social Capital out of Silicon Valley and GAN Ventures and Stout Street Capital out of Colorado. Those investors don’t have to look far for investments, so for them to come here and invest in us, that says something.
“It tells you we’re doing the right thing for our customers at the right time,” Dale added. “I think the level of investors shows we’re doing something special.”
Costello hasn’t hit profitability yet, but it’s certainly growing at a rapid pace. The company had four customers when it was founded early last year and now has nearly 50, Dale said.
“We’re starting to sign some pretty large clients,” Dale said. “In May, we signed our first Fortune 50 company.”
Dale said the funding will be used to double the staff—to about 20 by year’s end. Engineering, development, sales and customer support staffers are currently being added, Dale added.
The company is growing so fast, Dale said, Costello is moving into a new larger space within The Union 525 building on the south side of downtown. That move is scheduled to be complete by the end of the summer.
Costello makes software that salespeople can use during sales calls. The software, Dale said, helps keep salespeople on track by reminding them about the three to five most important points they need to make, prompts salespeople with appropriate questions for the prospect based on the conversation, and tracks data to tell people on a sales team which techniques are and aren’t working.
“The business world is changing. People want the same level of customization and personalization in business-to-business transactions as they’ve become accustomed to in their personal lives,” Dale said.
“To win, we have to deliver a great experience on every sales call, which is why we need to arm people with sales playbooks that cover the critical items,” he added. “We’re delivering a new, powerful way for sales teams to have great conversations every single time.”
Dale said the timing of Costello’s emergence is perfect. He points to a recent CSO Insights study that found that only 53 percent of salespeople in 2017 hit their sales quotas. CSO Insights reported that percentage has seen year-over-year declines for five consecutive years.
“There’s a big upheaval right now with how to deal with that, and we’re giving companies a platform to deal with it,” Dale said. “Salespeople have to drive value in their conversations with clients and prospects.”
“Costello completely disrupts the way sales teams use traditional call scripts and ad hoc tools by providing a solution that allows VPs, sales managers and sales reps alike to stay aligned and win together," said Greg Beaufait, partner at Dundee Capital, in a statement.
The new investments don't change the composition of Costello’s board of directors. Dale wouldn’t elaborate on how it changed the ownership of the company.
“My co-founder [Rod Feuer] and I still own a healthy percentage,” Dale said.