GROOVE • Part of growing tech hub
FROM ware startup, planting these kind of roots in San Diego would have been risky not long ago.
Silicon Valley is the global heart of tech venture capital — the lifeblood for young firms. Moreover, it’s a hotbed of executive talent who have built successful companies before. ServiceNow, the digital workflow software giant now valued at $131 billion, was founded in San Diego but moved to Santa Clara in 2011 after hiring a Bay Area-based CEO to shepherd its rapid growth.
But these days, the capital markets have changed, said Rothstein. Not only is more venture capital available, but investors are deploying it more widely across the country — particularly in tech hubs. Already, there is a cluster of several well-funded subscription software firms with beachheads in San Diego, including Seismic, Cloudbeds and Clickup.
Founded in 2014 by Rothstein, Alexander Kerschhofer and Austin Wang, Groove provides digital tools to help the sales forces at large companies. It syncs
with Salesforce and is a partner with San Diego’s Seismic, which provides a different set of tools to help with sales.
“It’s awesome that two of the up-and-coming tech platforms related to sales now have a direct presence in San Diego,” said Rothstein,
who worked previously at Google.
Driven by growth in digital selling during the pandemic, Groove says its annual recurring revenue has grown 114 percent over the past 12 months. New customers include Activision, iHeartMedia, LexisNexis, New Relic, TIBCO, Veeva and Wintrust.
The company’s Series B round of funding was led by Viking Global Investors. Existing investors Capital One Ventures, Level Equity, Quest Venture Partners and Uncork Capital also participated. It brings the total funding raised by Groove to $57 million.
Viking Global Capital, a large venture fund, also invested in San Diego’s Cloudbeds, which makes software targeting the hospitality industry. “It’s interesting that they and Softbank both now have multiple large deals here,” said Mike Krenn, head of Connect/San Diego Venture Group. “Another good sign for San Diego.”