Personal blog of Yzmir Ramirez

ActionIQ, which helps companies use their customer data to deliver personalized experiences, is announcing that it has extended its Series C funding, bringing the round to a total size of $100 million.

That number includes the $32 million that ActionIQ announced in January of last year. Founder and CEO Tasso Argyros said the company is framing this as an extension rather than a separate round because it comes from existing investors — including March Capital — and because ActionIQ still has most of that $32 million in the bank.

Argyros told me that there were two connected reasons to raise additional money now. For one thing, ActionIQ has seen 100% year-over-year revenue growth, allowing it to increase its valuation by more than 250%. (The company isn’t disclosing the actual valuation.) That growth has also meant that ActionIQ is getting “a lot more ambitious” in its plans for product development and customer growth.

“We raised more money because we can, and because we need to,” Argyros said.

The company continues to develop the core platform, for example by introducing more support for real-time data and analysis. But Argyros suggested that the biggest change has been in the broader market for customer data platforms, with companies like Morgan Stanley, The Hartford, Albertsons, JCPenney and GoPro signing on with ActionIQ in the past year.

Some of these enterprises, he said, “normally would not work with a cutting-edge technology company like us, but because of the pandemic, they’re willing to take some risk and really invest in their customer base and their customer experience.”

Argyros also argued that as regulators and large platforms restrict the ways that businesses can buy and sell third-party data, products like ActionIQ, focusing on the first-party data that companies collect for their own use, will become increasingly important. And he said that ActionIQ’s growth comes as the big marketing clouds have “failed” — either announcing products that have yet to launch or launching products that don’t match ActionIQ’s capabilities.

Companies that were already using ActionIQ include The New York Times. In fact, the funding announcement includes a statement from The Times’ senior vices president of data and insights Shane Murray declaring that the newspaper is using ActionIQ to deliver “hundreds of billions of personalized customer experiences” across “mail, in-app, site, and paid media.”

ActionIQ has now raised around $145 million total, according to Crunchbase.

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Segment, the startup Twilio bought last fall for $3.2 billion, was just beginning to take off in 2015 when it ran into a scaling problem: It was growing so quickly, the tools it had built to process marketing data on its platform were starting to outgrow the original system design.

Inaction would cause the company to hit a technology wall, managers feared. Every early-stage startup craves growth and Segment was no exception, but it also needed to begin thinking about how to make its data platform more resilient or reach a point where it could no longer handle the data it was moving through the system. It was — in a real sense — an existential crisis for the young business.

Segment’s engineering team began thinking hard about what a more robust and scalable system would look like. As it turned out, their vision would evolve in a number of ways between the end of 2015 and today, and with each iteration, they would take a leap in terms of how efficiently they allocated resources and processed data moving through its systems.

The project that came out of their efforts was called Centrifuge, and its purpose was to move data through Segment’s data pipes to wherever customers needed it quickly and efficiently at the lowest operating cost. This is the story of how that system came together.

Growing pains

The systemic issues became apparent the way they often do — when customers began complaining. When Tido Carriero, Segment’s chief product development officer, came on board at the end of 2015, he was charged with finding a solution. The issue involved the original system design, which like many early iterations from startups was designed to get the product to market with little thought given to future growth and the technical debt payment was coming due.

“We had [designed] our initial integrations architecture in a way that just wasn’t scalable in a number of different ways. We had been experiencing massive growth, and our CEO [Peter Reinhardt] came to me maybe three times within a month and reported various scaling challenges that either customers or partners of ours had alerted him to,” said Carriero.

The good news was that it was attracting customers and partners to the platform at a rapid clip, but it could all have come crashing down if the company didn’t improve the underlying system architecture to support the robust growth. As Carriero reports, that made it a stressful time, but having come from Dropbox, he was actually in a position to understand that it’s possible to completely rearchitect the business’s technology platform and live to tell about it.

“One of the things I learned from my past life [at Dropbox] is when you have a problem that’s just so core to your business, at a certain point you start to realize that you are the only company in the world kind of experiencing this problem at this kind of scale,” he said. For Dropbox that was related to storage, and for Segment it was processing large amounts of data concurrently.

In the build-versus-buy equation, Carriero knew that he had to build his way out of the problem. There was nothing out there that could solve Segment’s unique scaling issues. “Obviously that led us to believe that we really need to think about this a little bit differently, and that was when our Centrifuge V2 architecture was born,” he said.

Building the imperfect beast

The company began measuring system performance, at the time processing 8,442 events per second. When it began building V2 of its architecture, that number had grown to an average of 18,907 events per second.

The concept of the customer data platform (CDP) is a relatively new one. Up until now, it has focused primarily on pulling data about an individual consumer from a variety of channels into a super record, where in theory you can serve more meaningful content and deliver more customized experiences based on all this detailed knowledge. Adobe announced its intention today to create such a product for business to business (B2B) customers, a key market where this kind of data consolidation had been missing.

Indeed, Brian Glover, Adobe’s director of product marketing for Marketo Engage, who has been put in charge of this product, says that these kinds of sales are much more complex and B2B sales and marketing teams are clamoring for a CDP.

“We have spent the last couple of years integrating Marketo Engage across Adobe Experience Cloud, and now what we’re doing is building out the next generation of new and complementary B2B offerings on the Experience platform, the first of which is the B2B CDP offering,” Glover told me.

He says that they face unique challenges adapting CDP for B2B sales because they typically involve buying groups, meaning you need to customize your messages for different people depending on their role in the process.

An individual consumer usually knows what they want and you can prod them to make a decision and complete the purchase, but a B2B sale is usually longer and more complex, involving different levels of procurement. For example, in a technology sale, it may involve the CIO, a group, division or department who will be using the tech, the finance department, legal and others. There may be an RFP and the sales cycle may span months or even years.

Adobe believes this kind of sale should still be able to use the same customized messaging approach you use in an individual sale, perhaps even more so because of the inherent complexity in the process. Yet B2B marketers face the same issues as their B2C counterparts when it comes to having data spread across an organization.

“In B2B that complexity of buying groups and accounts just adds another level to the data management problem because ultimately you need to be able to connect to your customer people data, but you also need to be able to connect the account data too and be able to [bring] the two together,” Glover explained.

By building a more complete picture of each individual in the buying cycle, you can, as Glover puts it, begin to put the bread crumbs together for the entire account. He believes that a CRM isn’t built for this kind of complexity and it requires a specialty tool like a CDP built to support B2B sales and marketing.

Adobe is working with early customers on the product and expects to go into beta before the end of next month with GA some time in the first half of next year.

The pandemic has forced businesses to change the way they interact with customers. Whether it’s how they deliver goods and services, or how they communicate, there is one common denominator, and that’s that everything is being forced to be digitally driven much faster.

To some extent, that’s what drove Twilio to acquire Segment for $3.2 billion today. (We wrote about the deal over the weekend. Forbes broke the story last Friday night.) When you get down to it, the two companies fit together well, and expand the platform by giving Twilio customers access to valuable customer data. Chee Chew, Twilio’s chief product officer, says while it may feel like the company is pivoting in the direction of customer experience, they don’t necessarily see it that way.

“A lot of people have thought about us as a communications company, but we think of ourselves as a customer engagement company. We really think about how we help businesses communicate more effectively with their customers,” Chew told TechCrunch.

Laurie McCabe, co-founder and partner at SMB Group, sees the move related to the pandemic and the need companies have to serve customers in a more fully digital way. “More customers are realizing that delivering a great customer experience is key to survive through the pandemic, and thriving as the economy recovers — and are willing to spend to do this even in uncertain times,” McCabe said.

Certainly Chew recognized that Segment gives them something they were lacking by providing developers with direct access to customer data, and that could lead to some interesting applications.

“The data capabilities that Segment has are providing a full view of the customer. It really layers across everything we do. I think of it as a horizontal add across the channels and extending beyond. So I think it really helps us advance in a different sort of way […] towards getting the holistic view of the customer and enabling our customers to build intelligence services on top,” he said.

Brent Leary, founder and principal analyst at CRM Essentials, sees Segment helping to provide a powerful data-fueled developer experience. “This move allows Twilio to impact the data-insight-interaction-experience transformation process by removing friction from developers using their platform,” Leary explained. In other words, it gives developers that ability that Chew alluded to, to use data to build more varied applications using Twilio APIs.

Paul Greenberg, author of CRM at the Speed of Light, and founder and principal analyst at 56 Group, agrees, saying, “Segment gives Twilio the ability to use customer data in what is already a powerful unified communications platform and hub. And since it is, in effect, APIs for both, the flexibility [for developers] is enormous,” he said.

That may be so, but Holger Mueller, an analyst at Constellation Research, says the company has to be seeing that the pure communication parts of the platform like SMS are becoming increasingly commoditized, and this deal, along with the SendGrid acquisition in 2018, gives Twilio a place to expand its platform into a much more lucrative data space.

“Twilio needs more growth path and it looks like its strategy is moving up the stack, at least with the acquisition of Segment. Data movement and data residence compliance is a huge headache for enterprises when they build their next generation applications,” Mueller said.

As Chew said, early on the problems were related to building SMS messages into applications and that was the problem that Twilio was trying to solve because that’s what developers needed at the time, but as it moves forward, it wants to provide a more unified customer communications experience, and Segment should help advance that capability in a big way for them.

When Microsoft introduced its customer data platform last February, the focus was on simply connecting silos of data to help customers get the data into the system. But as the pandemic has taken hold this year, customers need deeper insight into their customers, and Microsoft has made some enhancements to the platform today.

James Phillips, president of Microsoft Business Applications Group, says the goal of the platform is about understanding customers at a deeper level. “From that depth of understanding our customers can engage their customers through the entirety of the customer lifecycle,” Phillips told TechCrunch.

That could involve a variety of activities, such as personalizing offers, speaking to them in a way that they know their customers want to be spoken to, offering them new products and services that better meet their needs or supporting them better, he said.

He adds that COVID-19 has changed customer priorities and forced them to make adjustments to the way they do business and how they interact with customers. “As everything’s gone digital, the need to deeply understand your customer and to increase the efficacy of those engagements has really been heightened through this pandemic,” he said.

The company is announcing several new components to the customer data platform product to help customers build that understanding. The first is called Engagement Insights, which, as the name implies takes, all that data they’ve pushed to the CDP to help understand how the company is engaging with the customer better and deliver more meaningful interactions. That goes into preview today.

“Engagement Insights is about directly funneling web, mobile and connected product data back into Customer Insights to help continue to enrich that understanding of the customer in order to better serve them,” he said.

The next piece is about putting AI to work on all that data to allow marketers to make more educated predictions about the customers based on what they know about them. This takes advantage of Azure Synapse Analytics and provides a set of pre-built AI templates to help customers with elements like predicting customer churn, automating product recommendations and estimating customer lifetime value.

In addition, the company is offering a data governance product to help protect that data, and it’s integrating with Microsoft Customer Voice, the company’s survey tool to give customers the ability to fill in the blanks in the data by asking the customers when all of the data doesn’t provide an answer.

Phillips says all of these capabilities are about helping customers be more agile, so that as the world shifts, as it has so dramatically this year, businesses can be in a better position to react to those changes more quickly and meet the changing customer requirements.

It’s worth noting that Microsoft clearly isn’t alone in this type of offering, as every big company that sells marketing tools from Adobe to Salesforce to SAP is offering similar products for similar reasons.

Acquia, the commercial company built on top of the open source Drupal content management system has pushed to be more than a publishing platform in recent years, using several strategic acquisitions to move into managing customer experience, and today the company announced a new approach to developing and marketing on the Drupal Cloud.

This involves bringing together developers and marketers under the umbrella of the new Acquia Open DXP platform. This approach has two main components: “What we’ve been working on is deep integration across our suite and pulling together our new foundational Drupal Cloud offering, and our new foundational Marketing Cloud offering,” Kevin Cochrane, senior vice president of product marketing at Acquia said.

The offerings bring together a set of acquisitions the company made over the last year including Mautic for marketing automation in May 2019, Cohesion for low-code developing in September and AgileOne in December for a customer data platform (CDP).

Cochrane says that the company is leveraging these acquisitions along with tools they developed internally and the upcoming release of Drupal 9 to offer a platform approach for customers where they can build content on the Drupal Cloud side and leverage customer data on the Marketing Cloud side.

On the Drupal Cloud, the company is offering a set of tools that includes an integrated development environment (IDE) where developers can build services, while marketers get a low code offering, where they can drag and drop content and design components from a library of offerings that could come from internal sources or the open source community. It also includes other components like security and content management.

The Marketing Cloud is the data layer where companies collect and manage data about customers with the goal of offering a more personalized and meaningful experience in a digital context.

Marketing automation tooling has shifted in recent years with the goal of providing customers with a unique and meaningful experience using the vast amount of data available to build a more complete picture of the customer and give them what they need, when they need it in a digital context. This has involved building a digital experience platform (DXP) and a customer data platform (CDP).

By pulling together these different elements, Acquia is attempting to put itself in a position to compete directly with big players in this space like Adobe and Salesforce offering a similar unified approach.

Vista Equity Partners bought Acquia last September for $1 billion. At the time, company founder Dries Buytaert said one of the advantages of being part of Vista was to get the resources to compete with larger companies in this space, and today’s announcement could be seen in that light.

Frame AI, a New York City startup that uses artificial intelligence and machine learning to help companies understand their customers better across multiple channels, announced a $6.3 million Series A investment today.

G20 Ventures and Greycroft led the round together. Bill Wiberg, co-founder and partner at G20, will join Frame’s board under the terms of the deal. The total raised with an earlier seed round is over $10 million, according to the company.

“Frame is basically an early warning system and continuous monitoring tool for your customer voice,” Frame CEO and co-founder George Davis told TechCrunch . What that means, in practice, is the tool plugs into help desk software, call center tooling, CRM systems and anywhere else in a company that communicates with a customer.

“We then use natural language understanding to pull out emerging themes and basically aggregate them to account and segment levels so that customer experience leaders can prioritize taking actions to improve their relationships,” Davis explained.

He believes that customer experience leaders are being asked to do more and more in terms of talking to customers on ever more channels and digesting that into useful information for the rest of their company to be responsive to customer needs, and he says that there isn’t a lot of tooling to help with this particular part of the customer experience problem.

“We don’t think they have the right tools to do either the listening in the first place or the analysis. We’re trying to make it possible for them to hear their customers everywhere they’re already talking to them, and then act on that information,” he said.

He says they work alongside customer data platforms (CDPs) like Segment, Salesforce Customer 360 and Adobe Real-time CDP. “We can take the customer voice information from all of these unstructured sources, all these natural language sources and turn it into moments that can be contributed back to one of these structured data platforms.”

Davis certainly recognizes that his company is getting this money in the middle of a health and economic crisis, and he hopes that a tool like his that can help take the pulse of the customer across multiple channels can help companies succeed at a time when a data-driven approach to customer experience is more important than ever.

He says that by continuing to hire through this and building his company, he can contribute to restarting the economic engine, even if in some small way.

“It’s a bleak time, but I have a lot of confidence in New York and in the country, in the customer experience community and in the world’s ability to bounce back strong from this. I think it’s actually created a lot of solidarity that we’re all going to find a lot of new opportunities, and we’re going to just keep building Frame as fast as we can.”

Yaguara, a Denver-based startup that wants to help e-commerce companies understand their customers better to deliver more meaningful experiences, announced a $7.2 million seed investment today.

The round was led by Foundation Capital with participation from Gradient Ventures, Rainfall Ventures and Zelkova. It also had help from some e-commerce heavy hitters including Warby Parker, Harry’s and Allbirds.

Yaguara CEO Jonathan Smalley was working at an agency building specialized cloud tools for online businesses when he recognized there was a need to pull data together into a single place and help companies understand their customer’s behavior better.

“Yaguara is based on integrating data and having all their data in the right place. For us, it started with several dozen tools from performance marketing to your actual e-commerce data to your fulfillment and unit economic data — bringing that all into one place letting them see their data in real time.”

“Then our platform serves predictive and prescriptive insights and recommendations to individual users across your teams, so they can drive specific outcomes across the organization based on that unified data set,” Smalley explained.

Screenshot: Yaguara

They build that data set by connecting to a variety of popular tools to help understand what’s happening across the customer lifecycle, whether that’s customer acquisition through Facebook or Google ads or understanding shopping cart abandonment data or how often the customer has returned to buy again, all of which help build a better picture of the customer.

While this may sound like a customer data platform (CDP), Smalley says it’s actually more than that. While the CDP provides the pipeline to your data sources like Yaguara, it doesn’t stop there. He says it reduces the complexity of helping front-line marketing personnel access and query that data without having to know SQL or R or have a technical intermediary to understand the data.

While the company is young it already has 250 e-commerce customers using the platform. With the new infusion of cash, it should be able to bring in more employees, build more data connectors and continue working to build out the platform.

ActionIQ co-founder and CEO Tasso Argyros knows there are plenty of companies promising to help businesses use their customer data to deliver personalized experiences — as he put it, “The space has gotten very, very hot over the last couple of years.”

But in the face of growing competition, ActionIQ (founded in 2014 and headquartered in New York) has attracted some impressive customers, like The New York Times, Conde Nast, American Eagle Outfitters, Vera Bradley and Pandora Media, as well as high-profile investors like Sequoia Capital and Andreessen Horowitz.

Today, it’s announcing that it has raised $32 million in Series C funding.

“At this point, we believe we are four to five years ahead of the market,” Argyros told me. “[Customer data platforms are] very hot, you see people really jumping into it, but nobody really has a product.”

He attributed the rise of these platforms to the growth in customer acquisition costs: “Everybody’s switched their focus from ‘How do we acquire more customers?’ to ‘How do you grow lifetime value?’ ”

The key, Argyros said, is “delivering personalized experiences at scale.” So if you’re a business trying to understand which customers need to be convinced to stick around, which customers are ready to upgrade to a paid subscription and so on, you need a platform like ActionIQ: “What’s common about all these questions is that they’re all data questions.”

He described ActionIQ’s approach as “product-first,” creating self-serve tools for enterprises rather than relying on consulting or IT services, and he said the product is designed to “drive intelligent actions activated through any channel.”

Argyros contrasted this approach with the large marketing clouds, where he said that stitching together products from various acquisitions has led to “a huge data gap between what marketing clouds promise and what they can actually deliver.” And he said other customer data platforms are limited to bringing the data together — but “just putting customer data in one place, that doesn’t mean business can use the customer data to drive value.”

March Capital Partners led the round, with participation from Cisco Ventures, as well as previous investors Sequoia, Andreessen and FirstMark Capital. Meredith Finn, a partner at March, is joining ActionIQ’s board of directors.

“From my professional experience at Salesforce and Twitter, when it comes to building a relationship with your customers, data is everything,” Finn said in a statement. “ActionIQ took a data-first approach from day one in contrast to many vendors that are now scrambling to address their data gaps by duct-taping data infrastructure to their existing point solutions. … The potential of such a platform is limitless, and spans well beyond traditional marketing channels to other areas of customer interactions including web and mobile app experiences, customer support and sales.”

ActionIQ has now raised a total of $75 million in funding. And while the Series C isn’t significantly larger that the $30 million that ActionIQ raised in 2017, Argyros said the company didn’t need to raise a huge round this time around, because it’s already built out the core product.

“A lot of dollars were invested heavily in the product way before the demand was there,” he said. “The Series B was pretty significant because there was so much upfront product investment. … Most of these funds are going towards expanding the business in sales and marketing.”

Acquia announced it has acquired customer data platform (CDP) startup AgilOne today. The companies did not disclose the purchase price.

CDPs are all the rage among customer experience vendors, as they provide a way to pull data from a variety of channels to build a more complete picture of the customer. The goal here is to deliver meaningful content to the customer based on what you know about them. Having a platform like this to draw upon makes it more likely that you will hit the target more accurately.

Acquia co-founder and CTO Dries Buytaert says he has been watching this space for the last year, and wanted to add this piece to the Acquia tool chest. “Adding a CDP like AgilOne to our existing platform will help our customers unify their data across various tools in their technology stack to drive better, more personal customer experiences,” he said.

In particular, he says he liked AgilOne because it used an intelligence layer while building the customer record. “What sets AgilOne apart from other CDPs are its machine learning capabilities, which intelligently segment customers and predict customer behaviors (such as when a customer is likely to purchase something). This allows for the creation and optimization of next-best action models to optimize offers and messages to customers on a 1:1 basis.”

Like most startup founders, AgilOne CEO Omer Artun sees this as an opportunity to grow his company, probably faster than he could have on his own. “Since AgilOne’s inception, our vision has been to give marketers the direct power to understand who their customers are and engage with them in a genuine way in order to boost profitability and create the omnichannel experiences that customers crave. Through this acquisition, Acquia will enable us to continue to deliver, and build upon, this vision,” he wrote in a blog post announcing the acquisition.

Tony Byrne, founder and principal analyst at the Real Story Group, has been watching the marketing automation space for some time, as well as the burgeoning CDP market. He sees this move as good for Acquia, but wonders how it will fit with other pieces in the Acquia stack. “This in theory allows them to support the unification of customer data across their suite,” Byrne told TechCrunch.

But he cautions that the company could struggle incorporating AgilOne into its platform. “The Marketing Automation platform they purchased targets mostly B2B. AgilOne is dialed in on B2C use cases and a fairly narrow set of vertical segments. It will take a lot of work to make it into a CDP that could adequately serve Acquia’s diverse customer base,” he said.

Acquia was acquired by Vista Equity Partners for $1 billion in September, and it tends to encourage its companies to be more acquisitive than they might have been on their own. “Vista has been supportive of our M&A strategy and believes strongly in AgilOne as a part of Acquia’s vision to redefine the customer experience stack,” Buytaert said.

AgilOne raised over $41 million, according to PitchBook data. Investors included Tenaya Capital, Sequoia Capital and Mayfield Fund. It had a post valuation of just over $115 million and was pegged as likely acquisition target by Pitchbook.

AgilOne customers will be happy to hear that Acquia plans to continue to sell it as a stand-alone product in addition to making it part of the Acquia Open Marketing Cloud.