Listen Labs drops $125M funding plan amid Salesforce talks

In short: Listen Labs backed out of a signed plan to raise $125 million after reports of acquisition talks with Salesforce.

What happened

Listen Labs, a three-year-old startup that uses voice-based AI to run customer interviews, had signed a term sheet for a new funding round, according to TechCrunch sources. A term sheet is a written outline of a deal, like a handshake on paper, before all final paperwork is done. The deal would have raised $125 million in a Series C round, and valued Listen Labs at $1.5 billion, with Menlo Ventures expected to lead.

But the funding round did not close. TechCrunch reports that Listen Labs walked away from the signed term sheet, which investors say is unusual in venture funding.

People familiar with the situation told TechCrunch the funding likely fell apart because Listen Labs is in acquisition talks with Salesforce. Business Insider previously reported Salesforce has discussed buying Listen Labs for around $2 billion, although any deal is not final and may not happen.

Listen Labs sells a service that can ask customers questions over audio or video, then turn those conversations into reports and slide decks. The company is reported to have about $30 million in annualized revenue, and its customers include Microsoft, Canva, Anthropic, and Sweetgreen. Listen Labs, Salesforce, Menlo Ventures, and competitor Simile did not immediately respond to requests for comment.

Why it matters

This shows how fast the customer research business is changing as more companies use AI to do work that used to take weeks and cost a lot. For everyday people, it can mean products and services may change faster, because companies can collect feedback and act on it more quickly.

Source: TechCrunch AI