Raleigh communications startup Levitate raises $8M as it continues to see rapid growth

Jesse Lipson, one of the Triangle’s most successful entrepreneurs of the last decade, is again finding success in the startup world.

His latest venture, Levitate, has now crossed 2,000 customers and is raising another round of capital from investors, adding $8 million to its coffers.

Levitate competes with email service companies like Mailchimp by providing more intimate communication tools, like reminders to message a customer personally, notes on previous conversations and analytical breakdowns of outreach. The company also provides marketing coaches to offer strategic support.

Its customers include small companies like law firms, real estate brokerages and financial advisers — essentially any firm that needs to regularly stay in touch with its customers.

That has proven to be in high-demand during the pandemic.

“I think it is hard to know what the business would have done outside of COVID. I think we would have grown quite a bit regardless,” Lipson said in a telephone interview. “Luckily it didn’t hurt us badly, and it may have helped us.”

Since the pandemic, Lipson noted, it has become harder for companies to keep in touch with people in person.

“You had to rely on electronic ways to keep in touch,” he said. “It did remind people of our value proposition: that it is important to keep in touch and maintain relationships with your customers.”

Companies also just needed to update customers more frequently, whether it was about changes in hours or other issues related to the pandemic.

Levitate has been able to use that to add more customers. Just last summer, the company was celebrating having 1,000 customers and a $6 million raise from investors.

Now, it’s already crossing the 2,000-customer mark and deciding to beef up its cash reserves. The $8 million raise is technically an add-on to its Series B that was started last year. It brings the company’s total fundraising up to $20 million.

Lipson said the uncertainty surrounding the pandemic last year led the company to raise a smaller amount than it initially planned, which was a $10 million round.

Now, that things are more clear, Lipson felt that raising more money would give the company more of a runway to grow.

“Last year kind of taught me that the world is very unpredictable, and even though it feels like we are mostly on the other side, who knows what could happen?” he said. “(It) showed me it is better to get through these next couple of years and prepare for anything, and having a nice war chest to survive any market turbulence.”

Rapid growth

The investors are the same as last year and include: Tippet Venture Partners, Peter Gassner (a billionaire software entrepreneur) and Bull City Venture Partners.

“Levitate has become the fastest growing company in our region,” Jason Caplain, general partner at Bull City Venture Partners, said in an email. “That momentum has only continued in 2021 as thousands of small businesses rely on Levitate to keep in touch with their customers and prospects. It has become one of our largest investments ever and we’re proud to be part of the journey.”

Lipson is also putting some of his own money into the round.

“I had some money in the stock market and I feel like Levitate is a much better investment than anything I can do in the public markets,” he said. “Why not double down on something that I feel really confident in.”

Lipson’s previous success in the local tech ecosystem was ShareFile, a file sharing software that grew to 50,000 customers after he sold it to Citrix for $54 million in 2011.

He was also the co-founder of the startup incubation hub, Raleigh Founded. Levitate, which was founded under the name Real Magic, now leases space at Raleigh Founded’s campus at Gateway Plaza.

Post-pandemic work space

The company, which grew from 40 employees to more than 100 last year, plans to take over more space there starting next week, Lipson said.

Lipson said he still hasn’t met most of the new employees in person yet because the pandemic has caused most employees to work remotely.

The startup is still aggressively hiring, and despite everyone being remote at the moment, most of that hiring is coming from the Raleigh area.

Lipson said Levitate will return to the office when it is safe to do so, though he acknowledged that flexibility in schedules will likely remain.

Before COVID-19 “the whole model was going into the office and then going home,” he said. “Now, I think what we may see is when you are in meetings and at your laptop chugging away, maybe it’s not as important to be in the office. You wouldn’t be chatting with people anyway because you are getting through five meetings with customers.”

Going forward, perhaps it will be “times out of meetings, the happy hour and lunch is when you want to get with people at work,” he said, noting that in-person interactions will still be important for building company culture.

Lipson said the market for talent in the Triangle is once again competitive. For a while, he noted, at the beginning of the pandemic, Levitate received huge numbers of applicants for positions.

“There were a lot of people looking for work during the summer because there were layoffs,” he said. “The hiring environment is back to normal for us because a lot of tech companies are doing well and there is a decent amount of competition for people like engineers and even sales and other roles.”

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate