$2B Acquisition Talks Prompt Listen Labs to Spurn $1.5B Investment Round

Listen Labs, a market research startup that uses voice AI to conduct customer interviews, has walked away from a $1.5 billion valuation after signing a term sheet for a $125 million Series C investment led by Menlo Ventures.

The company's founders believe their strategic value to a large acquirer far outweighs its standalone financial potential in the current market, so they are choosing to hold out for a premium exit with Salesforce, which has reportedly held talks to buy Listen Labs for around $2 billion.

Listen Labs' technology helps automate qualitative customer research by conducting thousands of interviews simultaneously without human intervention, and it has already attracted high-profile clients like Microsoft, Canva, and Sweetgreen. The company's annualized revenue is about $30 million, which is three times more than that of its competitor Simile.

While acquiring Listen Labs could strengthen Salesforce's AI capabilities, the CRM giant may ultimately decide that paying a 67-times-revenue multiple is too steep a valuation, especially in an era of heightened scrutiny on AI valuations.