Optimizing $1T of Sales Compensation- Congrats to Forma.ai!
We’re excited to announce today that Forma.ai has closed its Series B, led by ACME Capital. Crosslink’s relationship with Forma.ai began at the seed stage when we met Founder/CEO Nabeil Alazzam and his team in Toronto as they were transitioning from a bootstrapped startup into a venture-backed business. I was immediately struck by Nabeil’s founding story, domain experience, and passion for solving sales compensation at enterprise-scale, but admittedly wasn’t yet convinced of the depth of the pain point. Nabeil proved us wrong over the next year, and we were given the chance to take a closer look at the company and the depth of the problem for its customers at the Series A.
What became obvious after countless conversations with executives and customers is that the ~$1T spent on sales compensation every year is wildly under-optimized. Company executives are flying blind and primarily rely on gut instinct or rules of thumb to make sweeping decisions on what many consider to be the #1 driver of revenue performance — sales incentives. Not only are executives making under-informed decisions about sales incentives, but there is significant administrative overhead required for teams to make even basic changes to an existing compensation plan using the tools available in the market.
Nabeil and his team at Forma.ai have taken a transformational approach to managing and optimizing sales compensation. Forma is built on a novel architecture that enables data-driven decision making based on a shared customer data model that brings personalized insights to decision makers. Scenarios can be simulated on live data to understand their impact before decisions are made. In addition to its proprietary data model to optimize the selection of sales incentives, Forma’s platform is automated on the backend so that making changes to a comp plan is done without need for internal resources to build custom rules or consultants to deal with change management.
In result, Forma.ai removes the manual, labor-intensive work of managing comp plans and enables teams to focus on optimizing sales comp to maximize revenue performance. And it’s working! The company has grown revenue over 4x Y/Y with an impressive roster of customers that includes Autodesk, Stryker, OpenTable, Redis, and many others capturing considerable ROI from Forma’s product.
Crosslink led Forma’s Series A round in early 2021. We’re excited to announce today that we’ve doubled down into the Series B and are excited to bring on new partners in ACME Capital (welcome Brian and Hany!) to complement an already incredible group of investors that includes Golden Ventures, Uncork Capital, and xFund.
Cheers to Forma.ai on continuing its mission to finally solve sales compensation!