Originally published in AlleyWatch on December 21, 2021.
The knowledge economy has been the foundation of economic activity for developed nations since the 1960s. Prioritizing intellectual capital, allows businesses to be more efficient and dynamic, leading to innovation and customization but the skills that are required to succeed are continuously evolving, presenting a challenge for businesses. NewtonX is a B2B research and intelligence company that connects companies with subject matter experts for consultations, group workshops, or full-scale surveys. The company’s proprietary technology can reach over 1.1B professionals in 140 industries that businesses leaders are easily able to access to ensure they are receiving relevant information from the most relevant sources to power their critical decisions. All knowledge providers who engage with NewtonX have their backgrounds, subject matter expertise, and IDs checked by NewtonX to ensure all data is vetted, not collected based on flawed methodology, and is highly reflective.
AlleyWatch caught up with NewtonX Cofounder Sascha Eder to learn more about how NewtonX is able to leverage technology to modernize recruitment for B2B research, how the founding team’s experience in consulting led to founding the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $47M, and much, much more…
Who were your investors and how much did you raise?
NewtonX raised $32 million in our Series B funding round. The round is led by Marbruck Investments with support from Level One Fund backed by UBS O’Connor, Gaingels, and Heliad Partners. Existing investors Two Sigma, Third Prime, XFund, Story Ventures, and Switch participated as well.
Tell us about the product or service that NewtonX offers.
NewtonX is the leading B2B market research and intelligence company. We provide data and insights to today’s business leaders so they can make decisions with confidence.
Our technology addresses a big pain point in the market. Every day business leaders need to make hundreds of decisions, these decisions are often challenges that someone else has already solved. Connecting the business leaders with the question to those who already have the answers would be the ultimate competitive advantage to their decision-making. Yet, most market research providers rely on static expert networks, panels, or research associates to manually reach out to experts and as a result are not able to connect these professionals effectively.
At NewtonX we innovated on an outdated process with an “open-network” approach. Our AI-technology scans over 1.1 billion professionals across 140 industries and automatically identifies the most qualified professionals to deliver insights. We can then custom recruit hundreds of thousands of professionals daily to connect them to business leaders who need answers. Insights are delivered in the form of expert consultations, surveys from 10 to 10,000 participants or in-person meetings.
What inspired the start of NewtonX?
The company was founded on the belief that for organizations to thrive in the Global Innovation Economy, business strategists, leaders, and professionals must rely on validated, actionable insights to compete and survive in today’s economy.
While at McKinsey, we were systematically frustrated by the lack of quality, overall speed, and cost from third-party vendors for sourcing insights for our clients. After conducting hundreds of consultations and surveys for Fortune 100 companies without finding the right solution, we decided to create NewtonX to tackle the pain point of B2B market research.
While business decision-makers needed reliable data from highly specific populations, we often had no way of accessing this data at scale. Most B2B market research relies primarily on consumer-oriented panels where fraud can be rampant. Vetting for experience and verifying people are who they say they are becomes nearly impossible to do at scale. It was an opportunity to leverage AI and automation for insights in a new way.
How is NewtonX different?
We’re different from traditional market research companies because they often specialize in B2C research and have difficulty reaching B2B audiences given their lack of technology. Since we focus entirely on B2B research and recruiting, we understand how to find the niche audiences at scale.
There are two big differentiators that set us apart from other insights providers: our audience reach and the quality of our data.
Specifically, rather than pull from a closed pool of respondents in a traditional panel, we built the NewtonX Graph, our proprietary technology that sources from an open network of 1.1 billion B2B professionals across over 140 industries. This is how we deliver the largest possible reach without compromising any nuance.
Also, since we only work with B2B audiences, we call them professionals, we understand the importance of good data, bad data, and finding the absolute best professionals to answer our client’s questions. This means offering professionals fair compensation for their time and ensuring they are all 100% verified with a two-step ID check to make sure they are who they say they are.
What market does NewtonX target and how big is it?
Thanks to our technology and custom recruiting process, we can help clients, often enterprise organizations, with insights across any department, industry, or topic. In the past five years, we’ve been lucky to work with the Fortune 500 to the top consulting firms, financial institutions, and leading market research firms. Our clients span advertising, technology, media & internet publishers, financial services institutions, healthcare, and life sciences, manufacturing, human resources, and more.
What’s your business model?
We partner with leading organizations to conduct custom primary research on their behalf. Sometimes it’s easier to share a few examples of what this looks like:
- An advertiser tech company looking to understand its brand perception among advertisers from various countries and verticals
- A video gaming company trying to figure out how they can compete with tech giants and what aspects of an offer engineers value the most
- A social media firm trying to launch a virtual reality product and looking for use cases in enterprises
- A venture capital assessing a startup investment and coming to NewtonX to understand the broader competitive market in which the startup operates
What are your post-COVID office plans?
This summer we did a project with Fortune where we surveyed CFOs, CHROs, and senior leaders to get their thoughts on the future of work. Our research shows employees today want flexibility above all, and the option to collaborate in person. Those insights helped inform our own company policy of operating on an optional hybrid model. New York City-based employees are able to work and collaborate in-office if they choose. We’re carefully monitoring how COVID evolves and can easily adapt as needed.
What was the funding process like?
It’s an exhilarating roller coaster. From initial interest from a lot of VCs to the plethora of rejections (that all startup founders receive) to securing lead investors and eventually closing the round. It was really important to us to make sure there was a good cultural fit. That said, we’re feeling very fortunate to have our new partners on board and excited for what’s to come as we grow.
What are the biggest challenges that you faced while raising capital?
Making sure there was a cultural fit between our organizations. While a big name or a big figure can be alluring, at the end of the day it was more important to us to have a partner who would support us over the long term and share in our success.
What factors about your business led your investors to write the check?
Our proprietary AI technology, product-market fit, and of course our past four years of financial growth, future trajectory, and ability to scale globally.
Though, if we step back, they all saw what NewtonX provides plays a leading role in the future of business and has the potential to become the leader in the market (which is important for many VCs). Our product gives companies a competitive edge by connecting business leaders with insights they can’t access anywhere else. As data-driven decisions are increasingly expected, businesses will ultimately require insights leaders to validate their decisions with high-quality data.
What are the milestones you plan to achieve in the next six months?
We’re immediately looking to expand engineering, further develop our product suite, and build out the sales and marketing teams to increase NewtonX’s brand awareness among business leaders.
In an effort to further democratize access NewtonX’s high-quality B2B insights, clients will soon be able to receive answers to their business questions faster than ever before, access syndicated research and all of it at a fraction of the cost of traditional B2B market research.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
- We’ve found a lot of effective growth hacks that solved our problems in clever ways that didn’t require a lot of budget. While we still plan to have a thoughtful approach, successes aren’t always tied to spending money. Figure out things before you have money so you don’t get dependent on the capital.
- Raise early (6-12 months before you think you need it) because you never know what roadblocks might come up during a fundraise (e.g., a global pandemic)
Where do you see the company going now over the near term?
Companies should think of NewtonX as their go-to partner for B2B research. We’ll be raising awareness in our category through the growth of our sales and marketing organization. With an expanded team across engineering and product we will be bringing a new SaaS platform to market in the near future.
What’s your favorite outdoor dining restaurant in NYC?
Sauce! It’s a lowkey Italian restaurant in the Lower East Side with probably the best handmade Spaghetti in the city. It does not always have to be a fancy high-end restaurant for top food!
