Listen Labs, a market research startup that uses voice AI to conduct customer interviews, recently signed a term sheet for a $125 million Series C at a $1.5 billion valuation, with Menlo Ventures set to lead. According to several people with knowledge of the matter, the round never closed: the startup walked away from the signed term sheet, a rare move in venture capital that VCs generally frown upon. The financing likely collapsed because of acquisition talks with Salesforce, which has held discussions to buy Listen Labs for around $2 billion, as Business Insider reported. Those talks are not finalized and may not result in a deal.

Listen Labs is among the leading startups automating customer research with AI. The three-year-old company has roughly $30 million in annualized revenue, about three times more than Simile, a competing startup that predicts human behavior, according to two people familiar with the companies’ financials. In late July, Simile announced a $200 million Series B at a $2 billion valuation led by Greenoaks, likely setting a new valuation benchmark for Listen Labs, one person said. If the Salesforce talks collapse, several VCs told TechCrunch they expect Listen Labs to return to market and target a valuation of $2 billion or higher.

An acquisition could strengthen Salesforce‘s AI capabilities by using Listen Labs‘ AI to help predict customer needs. However, a person with experience negotiating exits to Salesforce said the CRM giant may ultimately decide that paying a 67 times revenue multiple is too steep a valuation.

Listen Labs was co-founded in 2023 by Florian Jüngermann, a former German national champion in competitive computer programming, and Alfred Wahlforss, who previously founded a staffing startup called Bemlo. The two met while pursuing master’s degrees at Harvard. The startup’s AI develops survey questions and interviews customers over audio or video, then packages conversations into reports and PowerPoint presentations similar to those human market researchers traditionally produce. Fortune 500 companies use such research to gauge customer needs and satisfaction, but traditional research is expensive and can take weeks. Listen Labs reduces the time and cost, helping companies understand reactions to product changes and iterate more efficiently.

Customers include Microsoft, Canva, Anthropic, and Sweetgreen. Competitors include Simile, Outset, Keplar, and Aaru. Some automate interviews with real humans; others like Aaru and Simile take a synthetic approach, using AI to simulate human behavior and predict responses without interviewing anyone. Listen Labs was previously valued at $500 million when it announced a $69 million Series B in late January led by Ribbit Capital, with participation from Sequoia, Conviction, and Pear VC. Listen Labs, Salesforce, Menlo Ventures, and Simile did not immediately respond to requests for comment.