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Pipedrive – a startup factory to breed unicorns

In order to reach to the desired unicorn status, you first must create a successful startup. Ragnar Sass, co-founder of Pipedrive, the latest unicorn from Estonian unicorn factory, tells us why there are so many successful startups growing out of the Estonian CRM company.

November started with a bang on the Estonian startup scene. Pipedrive, a company that develops customer relationship management (CRM) software for sales and marketing teams, announced signing an agreement to receive a majority investment from Vista Equity Partners, an Austin, Texas-based VC firm. The valuation of Pipedrive grew to 1.5 billion USD meaning it’s the fifth Estonian startup reaching unicorn status.

Both Skype and Pipedrive were backed by Niklas Zennström

Estonia now has five startups that have reached unicorn status meaning their valuation is over 1 billion US dollars:  Skype, Playtech, TransferWise, Bolt (formerly Taxify), and Pipedrive. As Vista Equity Partners now has a majority stake in Pipedrive it effectively means they’ve acquired Pipedrive.

Although the details of the deal have not been made public the word on the street is that of all of the Estonian unicorns to date only Skype’s exit surpassed Pipedrive’s. That is an interesting coincidence as both Skype and Pipedrive were backed by Swedish billionaire entrepreneur Niklas Zennström. The latter was his second investment in Estonia.

Pipedrive was founded in Estonia. The majority of the workforce is also based in Estonia but the headquarters has been moved over to New York. Besides Tallinn and Tartu, Pipedrive’s offices can be found in Prague, Lisbon, London, Riga, Dublin, St. Petersburg (Florida) and soon in Berlin as well. The company is aiming to be listed on the stock market in a few years.

Founded in 2010 by Timo Rein, Urmas Purde, Ragnar Sass, Martin Henk and Martin Tajur, Pipedrive’s main selling point has been that it’s a highly intuitive sales software built by sales people for sales people. According to Pipedrive, about 95,000 companies in the world use their solutions. Salesforce and Microsoft are the top players in the CRM market.

“Thanks to Pipedrive, Niklas came back to Estonia. Figuratively speaking, it looked like he was back at home,” explained Sass.

There was a huge influence of ex-Skypers in Pipedrive. The sale of Skype triggered a frenzy of starting new companies in Estonia. It’s apparent that the sale of Pipedrive will have the same effect.


How one failure can lead to another success

About 14 years ago Ragnar Sass ventured into entrepreneurship with his first startup, United Dogs and Cats. Simply said, it was supposed to be a Facebook for … you guessed it – dogs and cats. Ambient Sound Investments (ASI), a private investment company founded by four Skype founders Toivo Annus (1972-2020), Priit Kasesalu, Ahti Heinla and Jaan Tallinn, made an investment in Sass’s startup.

ASI organises events for the startups in their portfolio and one of them that took place in 2009 was around sales. During that event Sass got introduced to Urmas Purde and Timo Rein, both of whom had been in sales for years by that time.

About a year later it was clear that Sass’s first startup was not a success but rather a flop. Although Purde and Rein were strong in sales and they had an idea for a CRM, they lacked the technological know-how.

“When it became clear that United Dogs and Cats will not continue then in the spring of 2010 Purde and Rein contacted me about their CRM idea. Their main problem was that over half of CRM softwares were not actually used or catered to the needs of people doing the actual selling,” said Sass.

After exchanging emails with Purde he discussed the idea with Henk and Tajur. All of the parties involved decided that the concept seemed to be valid and they would go ahead as equal partners.

“Purde and Rein had both been in sales for many years. They started off with door-to-door sales. They had a clear vision in their heads what kind of CRM and to whom and why they wanted to build. They had even asked someone to draft a 50-page technical spec [for] what they wanted to build. We decided not to use that so we would not limit ourselves,” said Sass.

The first prototype was ready in the summer of 2010 and, according to Sass, if you compare them to the product used now in 2020 there are noticeable similarities. At the same time as Pipedrive began, Sass also started a hackathon series called Garage48.

Hiring people with a founder-like mentality

The business model of Pipedrive has stayed the same over the years. Although the company has not pivoted there have been many startups that have gotten off the ground thanks to Pipedrive. Sass thinks that the reason for that could be in the hiring process.

“We hired people that had the potential to become founders. That was one of the criteria we looked at when hiring. These kinds of employees start to think along with you. They act like they are the founders themselves.”

He gave the example of Martin Kõiva and Kair Käsper. Kõiva was the CEO of Cherry OÜ, a Groupon-like discount coupon website. Käsper ran a creative agency. They had the x-factor to be an entrepreneur. While working at Pipedrive, they created their own startup – Klaus –a B2B software tool for making internal feedback easy and systematic. Klaus raised around 2 million USD back in 2019 from the venture capital firm Creandum. Notably, Creandum was the first backer of Spotify. Klaus was their first investment in Estonia.

In September of 2020, Klaus secured another investment in the approximate amount of 5.5 million USD. The round was led by Global Founders Capital.

“I think there should be a motivational package in place that people believe and understand. I believe stock options should be a part of it. In the first years, we were really generous in it, in later years we pulled back a little,” said Sass.

He also believes that the overall work environment in the company was a contributor. Sass encouraged employees at Pipedrive to try out their own startup ideas and let him know if someone is building something exciting.

He has even invested in some of those ideas and that helped to build the founder-like culture inside the company.

“We did not have a program or an obligation for our employees that they also needed to work on their own startup ideas but as our work was organised in a way that employees had targets to hit we didn’t prohibit them to work on their own ideas at the same time while being employed at Pipedrive,” he noted.


One could imagine that holding a nine-to-five job and at the same time building your own startup could be counterproductive. But Sass says the opposite was true.

“I can’t remember any situation when someone’s startup affected their work in Pipedrive. Everyone seemed to know when was the right time to leave so they could focus on their idea to the fullest.”

There have been people that have left Pipedrive to pursue their own idea and after seeing it fail went back to work at Pipedrive.

“I even said to the employees that when your idea fails you can always come back. You have to pursue your idea because when you don’t do it you will regret it afterwards and start to think about ‘what-ifs’.”

At the time of the interview Sass counted seven startups that began at Pipedrive and, a few weeks later said that the count has gone up to about 10 or 11 but not all of the ideas ‘ready for primetime’.

Since the sale of the company made a lot of the employees at Pipedrive rich – some even millionaires – Sass predicts that the list will grow even bigger.

Our interview was conducted only a few short weeks after the big news broke and, by that time, Sass (an active angel investor himself) had been contacted by about 10 Pipedrive employees wanting to know how they can become angel investors too.

“We’ve been discussing potential investments already. I’m certain that in the coming months there will be more people wanting to try out angel investing,” he said.

Thanks to Garage48, Sass is a well-known person in the startup scene, not only in Estonia but also in Latvia, Lithuania, Belarus, Ukraine, throughout Africa and elsewhere. In 2020 he was pitched over 3000 startup ideas. As a result, he can usually evaluate what ideas have potential and which don’t.

“We gave company stock generously to our employees. Because of the sale they now see first-hand what kind of value the stock program has. Now they have a taste for it and they would like to repeat it. The ones that think becoming an entrepreneur yourself is too risky are looking towards angel investing.”

There could be a syndicate growing out of Pipedrive that makes several investments a year.  Sass says that they have yet to discuss how they will legally constitute themselves, but the desire to make it happen is there.

“When we find a startup that we like we could fill their whole round with angels that got their start from Pipedrive. I think that group of investors will make about five investments in 2021,” he stated.

Sass does not see a reason for the 700+ employees of Pipedrive to worry about the future of the company because the people that have been running it will continue to do it. He guarantees that Pipedrive will continue to be the same company that it has always been, with a big growth potential. Sass is keeping his eyes on one of the main competitors – Salesforce which is valued around 200 billion USD.

“Pipedrive has always considered important to support its employees’ personal as well as professional growth. When you have so many employees as Pipedrive has you will see how some of them want to try out being an entrepreneur and some just leave the company. If the departure rate stays around 20 people in three to four months then it’s normal.”

Referring to Skype, Sass says that in 2005 it was harder to reach unicorn status. For a B2C company it will take less time now. For Pipedrive (B2B) it took ten years.

Startups that got their start from Pipedrive

Eventtornado – Platform that takes care of every small detail of a hackathon. Co-founded by Pipedrive co-founder Martin Henk.

Outfunnel – Helps companies to bridge the gap between marketing and sales functions. Co-founded by Pipedrive alumnus Andrus Purde (not to be confused with Urmas Purde, his brother).

Klaus – Quality assurance software for support teams that measurably improves customer service quality by making internal feedback easy and systematic. Co-founders Martin Kõiva and Kair Käsper have worked at Pipedrive.

Alfred – Data protection made easy and accessible for companies. Co-founded by Pipedrive alumnus Martin Ojala and current employees Jaana Metsamaa, Maksym Viushkin, and Andrii Rozumnyi.

Hastli – Monitors company websites to find solutions to make the site better. Co-founded by Kristjan Hiis, Tambet Paljasma, Alar Kirikal, Rasmus Rüngenen and Pavel Baranov who all to this day work at Pipedrive.

10Lines – Autonomous robot that marks down lines in a parking lot. Co-founded by Pipedrive alumnus Janno Paas.

Fizure – Budgeting app for construction companies. Co-founded by Pipedrive alumnus Meelis Ojasild.

Mentornaut – Marketplace for tutors and their clients. Co-founded by Triinu Haller who to this day works at Pipedrive.

Single.Earth – Marketplace for generating profit from forests, wetlands, and other natural resources without selling them as raw materials, but by preserving them as carbon and biodiversity offset providers. Co-founded by Merit Valdsalu who to this day works at Pipedrive.

Marina Ahoy – A self-service enabled software for marina management and invoicing. Co-founded by Sergei Kretov who to this day works at Pipedrive.

Salto Network – a high level Upwork for startups that connects startups with top advisors and founders, focusing on scaling and growth. Salto also runs a 100-hour ultra intensive growth bootcamp twice a year. Co-founded by Pipedrive co-founder Ragnar Sass.

Merit Valdsalu: Sass personally has played a big role in the startup scene for me

Merit Valdsalu is just one of the many Pipedrivers that has taken advantage of the opportunity to pursue her own startup idea while working at the now unicorn organisation. According to her Ragnar Sass personally has played a big role in why she’s become a startup entrepreneur herself.

“He encouraged us to pursue our ideas. He has always been supportive and helpful. Thanks to Garage48 he has created a good and strong startup community in Estonia,” said Valdsalu.

She describes Pipedrive as an employee-friendly and motivating employer.

Her first startup, StandByMate, was born during the time she was the Head of Localisation at Pipedrive. With that effort she and the team intended to improve the maritime employment market. But StandByMate has ceased operations.

Her second startup, Single.Earth, coincides with Valdsalu going on maternity leave from Pipedrive. The Estonian parental leave system gives the option for a mom or dad to stay at home with the child for up to three years. For the first one and a half years the parent will receive monetary compensation from the state in the amount based on their previous average wage. Also your job is secured at your employer for the duration of parental leave.

Thanks to the parental leave system and to the sale of Pipedrive, Valdsalu is, at the moment, fully focused on the building of Single.Earth.

“I’ve gotten a good network, experience and foundation from Pipedrive on how to work on your own idea. Pipedrive helped to widen the view on startups and everything to do with them. The know-how and culture we got from there was huge.”

Valdsalu did not want to disclose whether she held any Pipedrive stock and said she values the experiences she had there even more than potential monetary assistance.

“At Pipedrive you could work on your own ideas without needing to worry that you will be looked at with a funny look. We even could discuss our ideas with the founders and they gave us their feedback and opinions. No one ever hindered anyone that worked on another startup.”

Valdsalu describes Single.Earth as a startup that aims to solve the problem of greenwashing. Right now greenwashing companies tend to spend money on some mysterious carbon offset projects without the deep knowledge of what the projects are really about.

“Our desire is to use the financial instruments that the companies already have and use for the environment and nature. We want to offer a fully-transparent, reliable and beneficial carbon offset option, so that nature will get the full benefit from it.”

For example, currently forests are valued only on the basis of how much wood they contain, but Single.Earth aims to change that by taking into account how much the forests bind carbon, how species-rich they are and how valuable the habitat is.

“We will initially use carbon offset business models to motivate forest owners to keep their forests growing instead of clearing them down. Single.Earth is a marketplace type of platform. Every forest or other natural resource owner can join our platform.”

On the other hand, they leave the option for companies, or even individuals who want to compensate for their carbon footprint, to support local owners of natural resources. Single.Earth has been in stealth mode for about a year now, but Valdsalu promises exciting news for the near future.

She sees that natural capital is becoming the most important investment instrument. Single.Earth facilitates natural capital investments that make a real impact on the climate and nature through business models like carbon allowances and biodiversity offset.

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