Nov
18
2020
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Grouparoo snares $3M seed to build open source customer data integration framework

Creating a great customer experience requires a lot of data from a variety of sources, and pulling that disparate data together has captured the attention of companies and big and small from Salesforce and Adobe to Segment and Klaviyo. Today, Grouparoo, a new startup from three industry vets is the next company up with an open source framework designed to make it easier for developers to access and make use of customer data.

The company announced a $3 million seed investment led by Eniac Ventures and Fuel Capital with participation from Hack VC, Liquid2, SCM Advisors and several unnamed angel investors.

Grouparoo CEO and co-founder Brian Leonard says that his company has created this open source customer data framework based on his own experience and difficulty getting customer data into the various tools he has been using since he was technical founder at TaskRabbit in 2008.

“We’re an open source data framework that helps companies easily sync their customer data from their database or warehouse to all of the SaaS tools where they need it. [After you] install it, you teach it about your customers, like what properties are important in each of those profiles. And then it allows you to segment them into the groups that matter,” Leonard explained.

This could be something like high earners in San Francisco along with names and addresses. Grouparoo can grab this data and transfer it to a marketing tool like Marketo or Zendesk and these tools could then learn who your VIP customers are.

For now the company is just the three founders Leonard, CTO Evan Tahler and COO Andy Jih, and while he wasn’t ready to commit to how many people he might hire in the next 12 months, he sees it being less than 10. At this early stage, the three co-founders have already been considering how to build a diverse and inclusive company, something he helped contribute to while he was at TaskRabbit.

“So, coming from [what we built at TaskRabbit] and starting something new, it’s important to all three of us to start [building a diverse company] from the beginning, and especially combined with this notion that we’re building something open source. We’ve been talking a lot about being open about our culture and what’s important to us,” he said.

TaskRabbit also comes into play in their investment where Fuel GP Leah Solivan was also founder of TaskRabbit. “Grouparoo is solving a real and acute issue that companies grapple with as they scale — giving every member of the team access to the data they need to drive revenue, acquire customers and improve real-time decision making. Brian, Andy and Evan have developed an elegant solution to an issue we experienced firsthand at TaskRabbit,” she said.

For now the company is taking an open source approach to build a community around the tool. It is still pre-revenue, but the plan is to find a way to build something commercial on top of the open source tooling. They are considering an open core license where they can add features or support or offer the tool as a service. Leonard says that is something they intend to work out in 2021.

Nov
09
2020
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Adobe acquires marketing workflow startup Workfront for $1.5B

Adobe just announced that it is acquiring marketing workflow management startup Workfront for $1.5 billion. Bloomberg first reported the sale earlier today.

Workfront was founded back in 2001, making it a bit long in the tooth for a private company that has raised $375 million, according to Crunchbase. (It’s worth noting that $280 million of that was secondary money raised last year.)

The acquisition gives Adobe more online marketing tooling to fit into its Experience Cloud. This one helps companies manage complex projects inside the marketing department (or elsewhere in the company, for that matter).

Suresh Vittal, VP of platform and product for Adobe Experience Cloud, said that the two companies often work together and encounter one another’s sales teams. As the pandemic has played out, it began to make more sense to bring in-house this kind of tooling that works well in a distributed environment, and over the last several months the deal came together.

“The new normal distributed marketing team, distributed experience delivery teams, people having to work remotely — we started to see new use cases emerge around the idea of work management, around the idea of content velocity, around the idea of providing compliance and governance capabilities so no asset escapes the organization, and it goes through this process of passing through creative and the marketing teams and getting out there and really representing your brand in the right way,” Vittal explained.

Workfront CEO Alex Shootman sees the deal as a way to accelerate the roadmap while working with a much larger company. “We are barely scratching the surface of marketing and we could grow tremendously, just by having that great kind of integrated relationship,” he said.

Holger Mueller, an analyst at Constellation Research, says the acquisition will help Adobe customers manage the complexities of marketing project management. “Scheduling and managing work had gotten orders of magnitude more complex for enterprises, and Adobe is accounting for that with the acquisition of Workfront, providing better tool support for the new future of work,” Mueller told TechCrunch.

Workfront’s 960 employees will become part of Adobe and become part of the Adobe Experience Cloud. Shootman will continue to run it and report to Anil Chakravarthy, executive vice president and general manager of the digital experience business at Adobe.

Workfront’s customers include Home Depot, T-Mobile and Deloitte, and the two companies share 1,000 common customers among Workfront’s 3,000 total customer base. In fact, it has APIs that connect to Adobe Creative Cloud and Experience Cloud, two parts of the company’s product family that marketers frequently access.

As Adobe battles Salesforce, SAP and Oracle in the marketing automation space, it’s been using its checkbook to acquire additional fire power in recent years. This acquisition comes after Adobe spent $1.6 billion for Magento and $4.75 billion for Marketo in 2018. That’s almost $8 billion for three companies in less than two years, even as it builds out parts of its Adobe Experience Cloud in-house. Combined, it shows just how serious the company is about making headway in this valuable area.

Customer experience has always been an essential element of online and in-person transactions, making sure the customer feels good about the interactions it has with a brand. It not only keeps them coming back, but it encourages them to act as ambassadors on behalf of a company, something that has incredible value.

Conversely, a bad experience can lead to the opposite impact, causing a prospective or even loyal customer to abandon a brand and speak badly about it to friends online and in person. Adobe hopes that by bringing another marketing tool into the fold, it can help its customers increase the likelihood of a positive online customer experience. This one should allow marketing personnel working at a company to move marketing projects through a workflow from idea to delivery.

The deal is expected to close in the first quarter of Adobe’s fiscal year. Per usual, it will be subject to typical regulatory scrutiny.

Oct
26
2020
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SAP shares fall sharply after COVID-19 cuts revenue, profit forecast at software giant

SAP announced its Q3 earnings yesterday, with its aggregate results down across the board. And after missing earnings expectations, the company also revised its 2021 outlook down. The combined bad news spooked investors, crashing its shares by more than 20% in pre-market trading, and the stock wasn’t showing any signs of improving in early trading.

The German software giant has lost tens of billions of dollars in market cap as a result.

The overall report was gloomy, with total revenues falling 4% to €6.54 billion, cloud and software revenue down 2% and operating profit down 12%. The only bright spot was its pure-cloud category, which grew 11%, to €1.98 billion.

SAP’s revenue result was around €310 million under expectations, though its per-share profit beat both adjusted and non-adjusted expectations.

While SAP’s big revenue miss might have been enough to send investors racing for the exits, its revised forecast doubled concerns. Even though the company said that its customers are accelerating their move to the cloud during the pandemic — something that TechCrunch has been tracking for some time now — SAP also said the pandemic is slowing sales and large projects.

Constellation Research analyst Holger Mueller says this is resulting in an unexpected revenue slow-down.

“What has happened at SAP is a cloud revenue delay as customers know that SAP is only investing into cloud products, and they have to migrate to those in the future. The news is that SAP customers are not migrating to the cloud during a pandemic,” Mueller told TechCrunch.

In a sign of the times, SAP spent a portion of its earnings results talking about 2025 results, a maneuver that failed to allay investor concerns that the pandemic was dramatically impacting SAP’s business today and in the coming year.

For 2020, SAP made the following cuts to its forecasts:

  • €8.0 – 8.2 billion non-IFRS cloud revenue at constant currencies (previously €8.3 – 8.7 billion)
  • €23.1 – 23.6 billion non-IFRS cloud and software revenue at constant currencies (previously €23.4 – 24.0 billion)
  • €27.2 – 27.8 billion non-IFRS total revenue at constant currencies (previously €27.8 – 28.5 billion)
  • €8.1 – 8.5 billion non-IFRS operating profit at constant currencies (previously €8.1 – 8.7 billion)

So, €300 million to €500 million in cloud revenue is now gone, along with €300 million to €400 million in cloud and software revenue, and €600 to €700 million in total revenue. That cut profit expectations by up to €200 million.

The company, however, is trying to put a happy face on the future projections, believing that as the impact of COVID begins to diminish, existing customers will eventually shift to the cloud and that will drive significant new revenues over the longer term. The trade-off is short-term pain for the next year or two.

“Over the next two years, we expect to see muted growth of revenue accompanied by a flat to slightly lower operating profit. After 2022 momentum will pick up considerably though. Initial headwinds of the accelerated cloud transition will start to turn into tailwinds for revenue and profit. […] That translates to accelerated revenue growth and double digit operating profit growth from 2023 onwards,” SAP CFO Luka Mucic said in a call with analysts this morning.

The question now becomes can they meet these projections, and if the longer-term approach during a pandemic will placate investors. As of this morning, they weren’t looking happy about it.

Oct
22
2020
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Customer experience and digital transformation concepts are merging during the pandemic

Customer experience and digital transformation are two terms we’ve been hearing about for years, but have often remained nebulous in many organizations — something to aspire to perhaps, but not take completely seriously. Yet the pandemic has been a forcing event for both concepts, thrusting the ideas front and center.

Suddenly startups that help with either of these concepts are seeing rising demand, even in a year with an overall difficult economic climate. If you are fortunate enough to be helping companies digitize a process or improve how customers interact with companies, you may be seeing increased interest from customers and potential acquirers (and this was true even before this year). A case in point is Twilio acquiring Segment for $3.2 billion recently to help build data-fueled applications to interact with customers.

Even though building a positive customer experience has never been completely about digital, at a time where it’s difficult to interact with customers in person, the digital side of it has taken new urgency. As COVID-19 took hold this year, businesses, large and small, suddenly realized the only way to connect to their customers was digitally. At that point, digital transformation became customer experience’s buddy when other ways of contacting one another have been severely limited.

Pandemic brings changes

Just about every startup founder I talk to these days, along with bigger, more established companies, talk about how the pandemic has pushed companies to digitally transform much faster than they would have without COVID.

Brent Leary, founder at CRM Essentials, says that the pandemic has certainly expedited the need to bring these two big ideas together and created opportunities as that happens. “The coronavirus, as terrible as it has been in so many ways to so many people, has created opportunities for companies to build direct-to-consumer (D2C) digital pipelines that can make them stronger companies despite the current hardships,” Leary told TechCrunch.

The cloud plays a big role in the digital transformation process, and for the last decade, we have seen companies make a slow but steady shift to the cloud. When you have a situation like we’ve had with the coronavirus, it speeds everything up. As it turns out, being in the cloud helps you move faster because you don’t have to worry about all of the overhead of running a business critical application as the SaaS vendors take care of all that for you.

Oct
01
2020
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Microsoft enhances customer data platform as pandemic drives need for personalization

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.

Oct
01
2020
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SAP continues to build out customer experience business with Emarsys acquisition

SAP seemed to be all in on customer experience when it acquired Qualtrics for $8 billion in 2018. It continued on that journey today when it announced it was acquiring Austrian cloud marketing company Emarsys for an undisclosed amount of money.

Emarsys, which raised over $55 million according to PitchBook data, gives SAP customer personalization technology. If you spoke to any marketing automation vendor over the last several years, the focus has been on using a variety of data and touch points to understand the customer better, and deliver more meaningful online experiences.

With the pandemic closing or limiting access to brick and mortar stores, personalization has taken a new urgency as customers are increasingly shopping online and companies need to meet them where they are.

With Emarsys, the company is getting an omnichannel marketing solution that they say is designed to deliver messages to customers wherever they are, including e-mail, mobile, social, SMS and the web, and deliver that at scale.

When SAP announced it was spinning out Qualtrics a couple of months ago, just 20 months after buying it, it left some question about whether SAP was fully committed to the customer experience business.

Brent Leary, founder and principal analyst at CRM Essentials, says that the acquisition shows that SAP is still very much in the game. “This illustrates that SAP is serious about CX and competing in a highly competitive space. Emarsys adds industry-specific customer engagement capabilities that should help SAP CX customers accelerate their efforts to provide their customers with the experiences they expect as their needs change over time,” Leary told TechCrunch.

As an ERP company at its core, SAP has traditionally focused on back-office kinds of operations. But Bob Stutz, president, SAP Customer Experience, sees this acquisition as a way to continue bringing back-office and front-office operations together.

“With Emarsys technology, SAP Customer Experience solutions can link commerce signals with the back office and activate the preferred channel of the customer with a relevant and consistently personalized message, allowing customers the freedom to choose their own engagement,” Stutz said in a statement.

The company, which is based in Austria, was founded back in 2000, when marketing was a very different world. It has built a customer base of 1,500 companies with 800 employees in 13 offices across the globe. All of this will become part of SAP, of course, and come under Stutz’s purview.

As with all transactions of this type it will be subject to regulatory approval, but the deal is expected to close this quarter.

Sep
22
2020
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EasySend raises $16M from Intel, more for its no-code approach to automating B2C interfaces

No-code and low-code software have become increasingly popular ways for companies — especially those that don’t count technology as part of their DNA — to bring in more updated IT processes without the heavy lifting needed to build and integrate services from the ground up.

As a mark of that trend, today, a company that has taken this approach to speeding up customer experience is announcing some funding. EasySend, an Israeli startup which has built a no-code platform for insurance companies and other regulated businesses to build out forms and other interfaces to take in customer information and subsequently use AI systems to process it more efficiently, is announcing that it has raised $16 million.

The funding has actually come in two tranches, a $5 million seed round from Vertex Ventures and Menora Insurance that it never disclosed, and another $11 million round that closed more recently, led by Hanaco with participation from Intel Capital. The company is already generating revenue, and did so from the start, enough that it was actually bootstrapped for the first three years of its life.

Tal Daskal, EasySend’s CEO and co-founder, said that the funding being announced today will be used to help it expand into more verticals: up to now its primary target has been insurance companies, although organically it’s picked up customers from a number of other verticals, such as telecoms carriers, banks and more.

The plan will be now to hone in on specifically marketing to and building solutions for the financial services sector, as well as hiring and expanding in Asia, Europe and the US.

Longer term, he said, that another area EasySend might like to look at more in the future is robotic process automation (RPA). RPA, and companies that deal in it like UIPath, Automation Anywhere and Blue Prism, is today focused on the back office, and EasySend’s focus on the “front office” integrates with leaders in that area. But over time, it would make sense for EasySend to cover this in a more holistic way, he added.

Menora was a strategic backer: it’s one of the largest insurance providers in Israel, Daskal said, and it used EasySend to build out better ways for consumers to submit data for claims and apply for insurance.

Intel, he said, is also strategic although how is still being worked out: what’s notable to mention here is that Intel has been building out a huge autonomous driving business in Israel, anchored by MobileEye, and not only will insurance (and overall risk management) play a big part in how that business develops, but longer term you can see how there will be a need for a lot of seamless customer interactions (and form filling) between would-be car owners, operators, and passengers in order for services to operate more efficiently.

Intel Capital chose to invest in EasySend because of its intelligent and impactful approach to accelerating digital transformation to improve customer experiences,” said Nick Washburn, senior managing director, Intel Capital, in a statement. “EasySend’s no-code platform utilizes AI to digitize thousands of forms quickly and easily, reducing development time from months to days, and transforming customer journeys that have been paper-based, inefficient and frustrating. In today’s world, this is more critical than ever before.”

The rise and persistence of Covid-19 globally has had a big, multi-faceted impact how we all do business, and two of those ways have fed directly into the growth of EasySend.

First, the move to remote working has given organizations a giant fillip to work on digital transformation, refreshing and replacing legacy systems with processes that work faster and rely on newer technologies.

Second, consumers have really reassessed their use of insurance services, specifically health and home policies, respectively to make sure they are better equipped in the event of a Covid-19-precipitated scare, and to make sure that they are adequately covered for how they now use their homes all hours of the day.

EasySend’s platform for building and running interfaces for customer experience fall directly into the kinds of apps and services that are being identified and updated, precisely at a time when its initial target customers, insurers, are seeing a surge in business. It’s that “perfect storm” of circumstances that the startup wouldn’t have wished on the world, but which has definitely helped it along.

While there are a lot of companies on the market today that help organizations automate and run their customer interaction processes, the Daskal said that EasySend’s focus on using AI to process information is what makes the startup more unique, as it can be used not just to run things, but to help improve how things work.

It’s not just about taking in character recognition and organizing data, it’s “understanding the business logic,” he said. “We have a lot of data and we can understand [for example] where customers left the process [when filling out forms]. We can give insights into how to increase the conversion rates.”

It’s that balance of providing tools to do business better today, as well as to focus on how to build more business for tomorrow, that has caught the eye of investors.

“Hanaco is firmly invested in building a digital future. By bridging the gap between manual processes and digitization, EasySend is making this not only possible, but also easy, affordable, and practical,” said Hanaco founding partner Alon Lifshitz, in a statement.

Aug
25
2020
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New Zendesk dashboard delivers customer service data in real time

Zendesk has been offering customers the ability to track customer service statistics for some time, but it has always been a look back. Today, the company announced a new product called Explore Enterprise that lets customers capture that valuable info in real time, and share it with anyone in the organization, whether they have a Zendesk license or not.

While it has had Explore in place for a couple of years now, Jon Aniano, senior VP of product at Zendesk says the new enterprise product is in response to growing customer data requirements. “We now have a way to deliver what we call Live Team Dashboards, which delivers real-time analytics directly to Zendesk users,” Aniano told TechCrunch.

In the days before COVID that meant displaying these on big monitors throughout the customer service center. Today, as we deal with the pandemic, and customer service reps are just as likely to be working from home, it means giving management the tools they need to understand what’s happening in real time, a growing requirement for Zendesk customers as they scale, regardless of the pandemic.

“What we’ve found over the last few years is that our customers’ appetite for operational analytics is insatiable, and as customers grow, as customer service needs get more complex, the demands on a contact center operator or customer service team are higher and higher, and teams really need new sets of tools and new types of capabilities to meet what they’re trying to do in delivering customer service at scale in the world,” Aniano told TechCrunch.

One of the reasons for this is the shift from phone and email as the primary ways of accessing customer service to messaging tools like WhatsApp. “With the shift to messaging, there are new demands on contact centers to be able to handle real-time interactions at scale with their customers,” he said.

In order to meet that kind of demand, it requires real-time analytics that Zendesk is providing with this announcement. This arms managers with the data they need to put their customer service resources where they are needed most in the moment in real time.

But Zendesk is also giving customers the ability to share these statistics with anyone in the company. “Users can share a dashboard or historical report with anybody in the company regardless of whether they have access to Zendesk. They can share it in Slack, or they can embed a dashboard anywhere where other people in the company would like to have access to those metrics,” Aniano explained.

The new service will be available starting on August 31 for $29 per user per month.

Jul
28
2020
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SAP decision to spin out Qualtrics 20 months after spending $8B surprises industry watchers

When SAP announced it was spinning out Qualtrics on Sunday, a company it bought less than two years ago for an eye-popping $8 billion, it was enough to make your head spin. At the time, then CEO Bill McDermott saw it as a way to bridge the company’s core operational with customer data, while acquiring a cloud company that could help generate recurring revenue for the ERP giant, and maybe give it a dose of innovation along the way.

But Sunday night the company announced it was spinning out the acquisition, giving its $8 billion baby independence, and essentially handing the company back to founder Ryan Smith, who will become the largest individual shareholder when this all over.

It’s not every day you see founders pull in a windfall like $8 billion, get sucked into the belly of the large corporate beast and come out the other side just 20 months later with the cash, independence and CEO as the largest individual stockholder.

While SAP will own a majority of the stock, much like Dell owns a majority of VMware, the company will operate independently and have its own board. It can acquire other firms and make decisions separately from SAP.

We spoke to a few industry analysts to find out what they think about all this, and while the reasoning behind the move involves a lot of complex pieces, it could be as simple as the deal was done under the previous CEO, and the new one was ready to move on from it.

Bold step

It’s certainly unusual for a company like SAP to spend this kind of money, and then turn around so quickly and spin it off. In fact, Brent Leary, principal analyst at CRM Essentials, says that this was a move he didn’t see coming, and it could be related to that fat purchase price. “To me it could mean that SAP didn’t see the synergies of the acquisition panning out as they had envisioned and are looking to recoup some of their investment,” Leary told TechCrunch.

Holger Mueller, an analyst with Constellation Research agreed with Leary’s assessment, but doesn’t think that means the deal failed. “SAP doesn’t lose anything in regards to their […] data and experience vision, as they still retain [controlling interest in Qualtrics] . It also opens the opportunity for Qualtrics to partner with other ERP vendors [and broaden its overall market],” he said.

Jeanne Bliss, founder and president at CustomerBLISS, a company that helps clients deliver better customer experiences sees this as a positive step forward for Qualtrics. “This spin off enables Qualtrics to focus on its core business and prove its ability to provide essential technology executives are searching for to enable speed of decision making, innovation and customization,” she said.

Show me the money

Patrick Moorhead, founder and principal analyst at Moor Insight & Strategy sees the two companies moving towards a VMware/Dell model where SAP removes the direct link between them, which could then make them more attractive to a broader range of customers than perhaps they would have been as part of the SAP family. “The big play here is all financial. With tech stocks up so high, SAP isn’t seeing the value in its stock. I am expecting a VMware kind of alignment with a strategic collaboration agreement,” he said.

Ultimately though, he says the the move reflects a cultural failure on the part of SAP. It simply couldn’t find a way to co-exist with a younger, more nimble company like Qualtrics. “I believe SAP spinning out Qualtrics is a sign that its close connection to create symbiotic value has failed. The original charter was to bring it in to modernize SAP but apparently the “not invented here” attitudes kicked in and doomed integration,” Moorhead said.

That symbiotic connection would have involved McDermott’s vision of combining operational and customer data, but Leary also suggested that since the deal happened under previous the CEO, that perhaps new CEO Christian Klein wants to start with a clean slate and this simply wasn’t his deal.

Qualtrics for the win

In the end, Qualtrics got all that money, gets to IPO after all, and returns to being an independent company selling to a larger potential customer base. All of the analysts we spoke to agreed the news is a win for Qualtrics itself.

Leary says the motivation for the original deal was to give SAP a company that could sell beyond its existing customer base. “It seems like that was the impetus for the acquisition, and the fact that SAP is spinning it off as an IPO 20 months after acquiring Qualtrics gives me the impression that things didn’t come together as expected,” he said.

Mueller also sees nothing but postivies Qualtrics. “It’s a win […] for Qualtrics, which can now deliver what they wanted [from the start], and it’s a win for customers as Qualtrics can run as fast as they want,” he said.

Regardless, the company moves on, and the Qualtrics IPO moves forward, and it’s almost as though Qualtrics gets a do-over with $8 billion in its pocket for its trouble.

Apr
22
2020
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Medallia acquires voice-to-text specialist Voci Technologies for $59M

M&A has largely slowed down in the current market, but there remain pockets of activity when the timing and price are right. Today, Medallia — a customer experience platform that scans online reviews, social media, and other sources to provide better insights into what a company is doing right and wrong and what needs to get addressed — announced that it would acquire Voci Technologies, a speech-to-text startup, for $59 million in cash.

Medallia plans to integrate the startup’s AI technology so that voice-based interactions — for example from calls into call centers — can be part of the data crunched by its analytics platform. Despite the rise of social media, messaging channels, and (currently) a shift for people to do a lot more online, voice still accounts for the majority of customer interactions for a business, so this is an important area for Medallia to tackle.

“Voci transcribes 100% of live and recorded calls into text that can be analyzed quickly to determine customer satisfaction, adding a powerful set of signals to the Medallia Experience Cloud,” said Leslie Stretch, president and CEO of Medallia, in a statement. “At the same time, Voci enables call analysis moments after each interaction has completed, optimizing every aspect of call center operations securely. Especially important as virtual and remote contact center operations take shape.”

While there are a lot of speech-to-text offerings in the market today, the key with Voci is that it is able to discern a number of other details in the call, including emotion, gender, sentiment, and voice biometric identity. It’s also able to filter out personal identifiable information to ensure more privacy around using the data for further analytics.

Voci started life as a spinout from Carnegie Mellon University (its three founders were all PhDs from the school), and it had raised a total of about $18 million from investors that included Grotech Ventures, Harbert Growth Parnters, and the university itself. It was last valued at $28 million in March 2018 (during a Series B raise), meaning that today’s acquisition was slightly more than double that value.

The company seems to have been on an upswing with its business. Voci has to date processed some 2 billion minutes of speech, and in January, the company published some momentum numbers that said bookings had grown some 63% in the last quarter, boosted by contact center customers.

In addition to contact centers, the company catered to companies in finance, healthcare, insurance and others areas of business process outsourcing, although it does not disclose names. As with all companies and organizations that have products that cater to offering services remotely, Voci has seen stronger demand for its business in recent weeks, at a time when many have curtailed physical contact due to COVID-19-related movement restrictions.

“Our whole company is delighted to be joining forces with experience management leader Medallia. We are thrilled that Voci’s powerful speech to text capabilities will become part of Medallia Experience Cloud,” said Mike Coney, CEO of Voci, in a statement. “The consolidation of all contact center signals with video, survey and other critical feedback is a game changer for the industry.”

It’s not clear whether Voci had been trying to raise money in the last few months, or if this was a proactive approach from Medallia. But more generally, M&A has found itself in a particularly key position in the world of tech: startups are finding it more challenging right now to raise money, and one big question has been whether that will lead to more hail-mary-style M&A plays, as one route for promising businesses and technologies to avoid shutting down altogether.

For its part, Medallia, which went public in July 2019 after raising money from the likes of Sequoia, has seen its stock hit like the rest of the market in recent weeks. Its current market cap is at around $2.8 billion, just $400 million more than its last private valuation.

The deal is expected to close in May 2020, Medallia said.

 

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