Cary-based startup marGo bills itself as the first direct sales marketing platform that harnesses the power of Salesforce and CRM (Customer Relationship Management) technology to empower direct sellers. Its case for that claim was strong enough to inspire marGo’s Cary neighbor, VC fund Cofounders Capital, to put a bunch of bills—$1.3M of them to be precise—into the startup.
Cofounders Capital—launched by serial entrepreneur David Gardner—syndicated its $1.3 million infusion alongside a significant investment from Rapp Ventures, finishing out a $4 million seed round for marGo and bringing the startup’s total funding to $8 million. The $1.3M marks the largest initial investment ever made by Cofounders. Rapp Ventures is a private equity firm based in (you guessed it) Cary.
Ecommerce and the gig economy in the direct sales market exploded during the pandemic, as furloughed or unemployed workers rushed into the market to become independent contractors. Tim McLoughlin, a Cofounders Capital partner, said the larger investment in marGo enables it to have the capital it needs to support the rapid growth it expects to continue in the coming months.
“marGo had a strong value prop pre-pandemic, and then it was the market that started to explode,” McLoughlin said, who is now on marGo’s board of directors. “And that’s something we’re really careful about when we look at our investment strategy—making sure the value prop resonates both pre- and post-pandemic.”
Besides the acceleration of the direct sales market, the experience level of marGo’s senior management team was another factor that made Cofounders Capital comfortable with a larger investment, McLoughlin said.
Alex Withers—an experienced digital marketing executive who previously held senior roles at ESPN, LexisNexis, and inMotionNow—joined marGo CEO Dean Yellets in September 2019 as Chief Operating Officer to help steer marGo’s investment and go-to-market strategy. Shortly after, the company signed a long-term deal with Salesforce to build marGo on its technology stack and raised $3 million from Rapp Ventures in an angel round. Ed Rapp of Rapp Ventures joined marGo’s board as Executive Chairman.
marGo harnesses the power of Salesforce to deliver personalized, multi-channel marketing programs at scale, including CRM (Customer Relationship Management) tools to help its users achieve success, engagement and higher customer retention by helping sellers execute marketing campaigns and follow up with customers, such as by facilitating timely communication via text and email.
Says CEO Yellets, “I just knew there had to be a better way to not only inspire direct sellers by giving them the tools to automatically and easily launch personalized, digital marketing programs, but also to create a truly intelligent, interconnected ecosystem between direct sales organizations, the field and their customers.”
Withers said because direct sales companies sell their product through independent sellers, they essentially have a huge ecosystem of people who are not employees, but still need to be marketers. Traditional marketing automation solutions are designed for trained corporate marketing teams, paying thousands of dollars a year per seat. Whereas with marGo, direct sales companies can both arm their corporate marketing team and pay less than $10 a month for each of their sellers to have an easy-to-use digital marketing app in their hand, Withers said.
“That’s what marGo has done—we’ve taken the best of Salesforce, we’ve knitted it together, and we’ve put it in a democratized package,” Withers said. “So the direct sellers at any level can log in and use it to sell their products and services and market their business in minutes or seconds, without having to be a corporate marketing team.”