Nov
17
2020
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Marketing automation platform Klaviyo scores $200M Series C on $4.15B valuation

Boston-based marketing automation firm Klaviyo wants to change the way marketers interact with data, giving them direct access to their data and their customers. It believes that makes it easier to customize the messages and produce better results. Investors apparently agree, awarding the company a $200 million Series C on a hefty $4.15 billion valuation today.

The round was led by Accel with help from Summit Partners. It comes on the heels of last year’s $150 million Series B, and brings the total raised to $385.5 million, according the company. Accel’s Ping Li will also be joining the company board under the terms of today’s announcement.

Marketing automation and communication takes on a special significance as we find ourselves in the midst of this pandemic and companies need to find ways to communicate in meaningful ways with customers who can’t come into brick and mortar establishments. Company CEO and co-founder Andrew Bialecki says that his company’s unique use of data helps in this regard.

“I think our success is because we are a hybrid customer data and marketing platform. We think about what it takes to create these owned experiences. They’re very contextual and you need all of that customer data, not some of it, all of it, and you need that to be tightly coupled with how you’re building customer experiences,” Bialecki explained.

Andrew Bialecki, CEO and co-founder at Klaviyo

Andrew Bialecki, CEO and co-founder at Klaviyo Image Credits: Klaviyo

He believes that by providing a platform of this scope that combines the data, the ability to customize messages and the use of machine learning to keep improving that, it will help them compete with the largest platforms. In fact his goal is to help companies understand that they don’t have to give up their customer data to Amazon, Google and Facebook.

“The flip side of that is growing through Amazon where you give up all your customer data, or Facebook or Google where you kind of are delegated to wherever their algorithms decide where you get to show up,” he said. With Klaviyo, the company retains its own data, and Ping Li, who is leading the investment at Accel says that it where the e-commerce market is going.

“So the question is, is there a tool that allows you to do that as easily as going on Facebook and Google, and I think that’s the vision and the promise that Klaviyo is delivering on,” Li said.  He believes that this will allow their customers to actually build that kind of fidelity with their customers by going directly to them, instead of through a third-party intermediary.

The company has seen some significant success with 50,000 customers in 125 countries along with that lofty valuation. The customer number has doubled year over year, even during the economic malaise brought on by the pandemic.

Today, the company has 500 employees with plans to double that in the next year. As he grows his company, Bialecki believes diversity is not just the right thing to do, it’s also smart business. “I think the competitive advantages that tech companies are going to have going forward, especially for the tech companies that are not the leaders today, but [could be] leaders in the coming decades, it’s because they have the most diverse teams and inclusive culture and those are both big focuses for us,” he said.

As they move forward flush with this cash, the company wants to continue to build out the platform, giving customers access to a set of tools that allow them to know their own customers on an increasingly granular level, while delivering more meaningful interactions. “It’s all about accelerating product development and getting into new markets,” Bialecki said. They certainly have plenty of runway to do that now.

Nov
02
2020
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Email creation startup Stensul raises $16M

Stensul, a startup aiming to streamline the process of building marketing emails, has raised $16 million in Series B funding.

When the company raised its $7 million Series A two years ago, founder and CEO Noah Dinkin told me about how it spun out of his previous startup, FanBridge. And while there are many products focused on email delivery, he said Stensul is focused on the email creation process.

Dinkin made many similar points when we discussed the Series B last week. He said that for many teams, creating a marketing email can take weeks. With Stensul, that process can be reduced to just two hours, with marketers able to create the email on their own, without asking developers for help. Things like brand guidelines are already built in, and it’s easy to get feedback and approval from executives and other teams.

Dinkin also noted that while the big marketing clouds all include “some kind of email builder, it’s not their center of gravity.”

He added, “What we tell folks [is that] literally over half the company is engineers, and they are only working on email creation.”

Stensul

Image Credits: Stensul

The team has recently grown to more than 100 employees, with new customers like Capital One, ASICS Digital, Greenhouse, Samsung, AppDynamics, Kroger and Clover Health. New features include an integration with work management platform Workfront.

Plus, with other marketing channels paused or diminished during the pandemic, Dinkin said that email has only become more important, with the old, time-intensive process becoming more and more of a burden.

“We need more emails — whether that’s more versions or more segments or more languages, the requests are through the roof,” he said. “The teams are the same size … and so that’s where especially the leaders of these organizations have looked inward a lot more. The ways that they have been doing it for years or decades just doesn’t work anymore and prevents them from being competitive in the marketplace.”

The new round was led by USVP, with participation from Capital One Ventures, Peak State Ventures, plus existing investors Javelin Venture Partners, Uncork Capital, First Round Capital and Lowercase Capital . Individual investors include Okta co-founder and COO Frederic Kerrest, Okta CMO Ryan Carlson, former Marketo/Adobe executive Aaron Bird, Avid Larizadeh Duggan, Gary Swart and Talend CMO Lauren Vaccarello.

Dinkin said the money will allow Stensul to expand its marketing, product, engineering and sales teams.

“We originally thought: Everybody who sends email should have an email creation platform,” he said. “And ‘everyone who sends email’ is synonymous with ‘every company in the world.’ We’ve just seen that accelerate in that last few years.”

Oct
26
2020
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Freshworks (re-)launches its CRM service

Freshworks, the customer and employee engagement company that offers a range of products, from call center and customer support software to HR tools and marketing automation services, today announced the launch of its newest product: Freshworks CRM. The new service, which the company built on top of its new Freshworks Neo platform, is meant to give sales and marketing teams all of the tools they need to get a better view of their customers — with a bit of machine learning thrown in for better predictions.

Freshworks CRM is essentially a rebrand of the company’s Freshsales service, combined with the company’s capabilities of its Freshmarketer marketing automation tool.

“Freshworks CRM unites Freshsales and Freshmarketer capabilities into one solution, which leverages an embedded customer data platform for an unprecedented and 360-degree view of the customer throughout their entire journey,” a company spokesperson told me.

The promise here is that this improved CRM solution is able to provide teams with a more complete view of their (potential) customers thanks to the unified view — and aggregated data — that the company’s Neo platform provides.

The company argues that the majority of CRM users quickly become disillusioned with their CRM service of choice — and the reason for that is because the data is poor. That’s where Freshworks thinks it can make a difference.

Freshworks CRM delivers upon the original promise of CRM: a single solution that combines AI-driven data, insights and intelligence and puts the customer front and center of business goals,” said Prakash Ramamurthy, the company’s chief product officer. “We built Freshworks CRM to harness the power of data and create immediate value, challenging legacy CRM solutions that have failed sales teams with clunky interfaces and incomplete data.”

The idea here is to provide teams with all of their marketing and sales data in a single dashboard and provide AI-assisted insights to them to help drive their decision making, which in turn should lead to a better customer experience — and more sales. The service offers predictive lead scoring and qualification, based on a host of signals users can customize to their needs, as well as Slack and Teams integrations, built-in telephony with call recording to reach out to prospects and more. A lot of these features were already available in Freshsales, too.

“The challenge for online education is the ‘completion rate’. To increase this, we need to understand the ‘Why’ aspect for a student to attend a course and design ‘What’ & ‘How’ to meet the personalized needs of our students so they can achieve their individual goals,” said Mamnoon Hadi Khan, the chief analytics officer at Shaw Academy. “With Freshworks CRM, Shaw Academy can track the entire student customer journey to better engage with them through our dedicated Student Success Managers and leverage AI to personalize their learning experience — meeting their objectives.”

Pricing for Freshworks CRM starts at $29 per user/month and goes up to $125 per user/month for the full enterprise plan with more advanced features.

Jul
29
2020
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Hearsay, maker of compliant tools for financial services, deepens ties with Salesforce

Financial services companies like banks and insurance tend to be heavily regulated. As such, they require a special level of security and auditability. Hearsay, which makes compliant communications tools for these types of companies, announced a new partnership with Salesforce today, enabling smooth integration with Salesforce CRM and marketing automation tools.

The company also announced that Salesforce would be taking a minority stake in Hearsay, although company co-founder and CEO Clara Shih, did not provide any details on that part of the announcement.

Shih says the company created the social selling category when it launched 10 years ago. Today, it provides a set of tools like email, messaging and websites along with a governance layer to help financial services companies interact with customers in a compliant way. Their customers are primarily in banking, insurance, wealth management and mortgages.

She said that they realized if they could find a way to share the data they were collecting with the Hearsay tool set with CRM and marketing automation software in an automated way, it would make greater use of this information than it could on its own. To that end, they have created a set of APIs to enable that with some built-in connectors. The first one will be to connect Hearsay to Salesforce, with plans to add other vendors in the future.

“It’s about being able to connect [data from Hearsay] with the CRM system of record, and then analyzing it across thousands, if not tens of thousands of advisors or bankers in a single company, to uncover best practices. You could then use that information like GPS driving directions that help every advisor behave in the moment and reach out in the moment like the very best advisor would,” Shih explained.

In practice, this means sharing the information with the customer data platform (CDP), the CRM and marketing automation tooling to deliver more intelligent targeting based on a richer body of information. So the advisor can use information gleaned from everything he or she knows about the client across the set of tools to deliver a more meaningful personal message instead of a targeted ad or an email blast. As Shih points out, the ad might even make sense, but could be tone deaf depending on the circumstances.

“What we focus on is this human-client experience, and that can only be delivered in the last mile because it’s only with the advisor that many clients will confide in these very important life events and life decisions, and then conversely, it’s only in the last mile that the trusted advisor can deliver relationship advice,” she said.

She says what they are trying to do by combining streams of data about the customer is build loyalty in a way that pure technology solutions just aren’t capable of doing. As she says, nobody says they are switching banks because it has the best chat bot.

Hearsay was founded in 2009 and has raised $51 million, as well as whatever other money Salesforce will be adding to the mix with today’s investment. Other investors include Sequoia and NEA Associates. Its last raise was way back in 2013, a $30 million Series C.

May
16
2019
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SugarCRM moves into marketing automation with Salesfusion acquisition

SugarCRM announced today that it has acquired Atlanta-based Salesfusion to help build out the marketing automation side of its business. The deal closed last Friday. The companies did not share the purchase price.

CEO Craig Charlton, who joined the company in February, says he recognized that marketing automation was an area of the platform that badly needed enhancing. Faced with a build or buy decision, he decided it would be faster to buy a company and began looking for an acquisition target.

“We spent the last three or four months doing a fairly intensive market scan and dealing with a number of the possible opportunities, and we decided that Salesfusion was head and shoulders above the rest for a variety of reasons,” he told TechCrunch.

Among those was the fact the company was still growing and some of the targets Sugar looked at were actually shrinking in size. The real attraction for him was Salesfusion’s customer focus. “They have a very differentiated on-boarding process, which I hadn’t seen before. I think that’s one of the reasons why they get such a quick time to value for the customers is because they literally hold their hand for 12 weeks until they graduate from the on-boarding process. And when they graduate, they’re actually live with the product,” he said.

Brent Leary, principal at CRM Essentials, who is also based in Atlanta, thinks this firm could help Sugar by giving it a marketing automation story all its own. “Salesfusion gives Sugar a marketing automation piece they can fully bring into their fold and not have to be at the whims of marketing automation vendors, who end up not being the best fit as partners, whether it’s due to acquisition or instability of leadership at chosen partners,” Leary told TechCrunch.

It has been a period of transition for SugarCRM, which has had a hard time keeping up with giants in the industry, particularly Salesforce. The company dipped into the private equity market last summer and took a substantial investment from Accel-KKR, which several reports pegged as a nine-figure deal, and PitchBook characterized as a leveraged buyout.

As part of that investment, the company replaced long-time CEO Larry Augustin with Charlton and began creating a plan to spend some of that money. In March, it bought email integration firm Collabspot, and Charlton says they aren’t finished yet, with possibly two or three more acquisitions on target for this quarter alone.

“We’re looking to make some waves and grow very aggressively and to drive home some really compelling differentiation that we have, and that will be building over the next 12 to 24 months,” he said.

Salesfusion was founded in 2007 and raised $16 million, according to the company. It will continue to operate out of its offices in Atlanta. The company’s 50 employees are now part of Sugar.

Apr
23
2019
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Blueshift announces $15M Series B to expand AI-fueled cross-channel marketing tool

Blueshift is a startup founded by tech industry veterans who saw first-hand how difficult cross-channel marketing was. They decided to launch a company and build a cross-channel marketing platform from the ground up that uses AI and machine learning to make sense of the growing amount of customer data. Today, the startup announced a $15 million Series B round to keep it going.

The round was led by SoftBank Ventures Asia, a fund focused on AI startups like Blueshift . Previous investors Storm Ventures and Nexus Venture Partners also participated. Today’s investment brings the total raised to $30 million, according to the company.

Company co-founder and CEO Vijay Chittoor says the marketing landscape is changing, and he believes that requires a new approach to allow marketers to take advantage of the multiple channels where they could be engaging with customers from a single tool.

“If you thought about the world of customer engagement at Walmart or Groupon [or any other retailer] 10 years ago, it was primarily an email problem. Today, we as customers, we’re interacting with these brands on not just email, but also on mobile notifications, Facebook custom audiences and WeChat [and across multiple other channels],” he explained.

He says that this has created a lot more data, which it turns out is a double-edged sword for marketing pros. “I think on one end, it’s exciting for a marketer or a CMO to have more data and more channels. It gives them more ways to connect. But at the same time, it’s also more challenging because now you have to make sense of a thousand times more data. And you have to use it intelligently on not just one channel like email, but you’re now trying to make sense of data across 15 different channels,” Chittoor said.

This a crowded field, with big players like Adobe, Salesforce and Oracle, among others, offering similar cross-channel, AI-fueled solutions. In addition, startups are attracting huge chunks of money to attack this problem, including Klayvio pulling in $150 million a couple of weeks ago and Iterable, which landed $50 million last month.

He says his company’s differentiator is the AI piece, and it is this piece that the company’s lead investor in this round has been focusing on in its investments. The company plans to use this round to continue building out its marketing platform and show marketers how to communicate intelligently across channels wherever the consumer happens to be. Customers include LendingTree, Udacity and BBC.

Mar
29
2019
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Marketing tech vendors need to find right balance between digital and human interactions

As I walked the long halls of Adobe Summit this week in Las Vegas and listened to the company’s marketing and data integration story, I thought about the obvious disconnect that happens between brands and their customers. With tons of data, a growing set of tools to bring it together and a desire to build an optimal experience, you would think we have been set up for thrilling consumer experiences, yet we all know that is not always what happens when the rubber meets the road.

Maybe part of the problem is that data sitting in databases doesn’t always translate into employee action when dealing directly with consumers. In many cases, the experience isn’t smooth, data isn’t passed from one source to another and when you do eventually reach a person, they aren’t always knowledgeable or even nice.

It’s to the point that when my data does get passed smoothly from bot to human CSA, and I’m not asked for the same information for the second or even third time, I’m pleasantly surprised, even a little shocked.

That’s probably not the story marketing automation vendors like Adobe and Salesforce want to hear, but it is probably far more common than the one about delighted customers. I understand the goal is to provide APIs to connect systems. It’s to stream data in real time from a variety of channels. It’s about understanding that data better by applying intelligent analytics, and to some extent I’m sure that’s happening and there are brands that truly do want to delight us.

The disconnect could be happening because brands can control what happens in the digital world much better than the real one. They can know at a precise level when you interact with them and try to right wrongs or inconsistencies as quickly as possible. The problem is when we move to human interactions — people talking to people at the point of sale in a store, or in an office or via any communications channel — all of that data might not be helpful or even available.

The answer to that isn’t to give us more digital tools, or more tech in general, but to work to improve human-to-human communication, and maybe arm those human employees with the very types of information they need to understand the person they are dealing with when they are standing in front of them.

If brands can eventually get these human touch points right, they will build more loyal customers who want to come back, the ultimate goal, but right now the emphasis seems to be more on technology and the digital realm. That may not always achieve the desired results.

This is not necessarily the fault of Adobe, Salesforce or any technology vendor trying to solve this problem, but the human side of the equation needs to be a much stronger point of focus than it currently seems to be. In the end, all the data in the world isn’t going to save a brand from a rude or uninformed employee in the moment of customer contact, and that one bad moment can haunt a brand for a long, long time, regardless of how sophisticated the marketing technology it’s using may be.

Jan
15
2019
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Campaign Monitor acquires email enterprise services Sailthru and Liveclicker

CM Group, the organization behind email-centric services like Campaign Monitor and Emma, today announced that it has acquired marketing automation firm Sailthru and the email personalization service Liveclicker. The group did not disclose the acquisition price but noted that the acquisition would bring in about $60 million in additional revenue and 540 new customers, including Bloomberg and Samsung. Both of these acquisitions quietly closed in 2018.

Compared to Sailthru, which had raised a total of about $250 million in venture funding before the acquisition, Liveclicker is a relatively small company that was bootstrapped and never raised any outside funding. Still, Liveclicker managed to attract customers like AT&T, Quicken Loans and TJX Companies by offering them the ability to personalize their email messages and tailor them to their customers.

Sailthru’s product portfolio is also quite a bit broader and includes similar email marketing tools, but also services to personalize mobile and web experiences, as well as tools to predict churn and make other retail-focused predictions.

“Sailthru and Liveclicker are extraordinary technologies capable of solving important marketing problems, and we will be making additional investments in the businesses to further accelerate their growth,” writes Wellford Dillard, CEO of CM Group. “Bringing these brands together makes it possible for us to provide marketers with the ideal solution for their needs as they navigate the complex and rapidly changing environments in which they operate.”

With this acquisition, the CM Group now has 500 employees and 300,000 customers.

Sep
20
2018
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Adobe gets its company, snaring Marketo for $4.75 billion

A week ago rumors were flying that Adobe would be buying Marketo, and lo and behold it announced today that it was acquiring the marketing automation company for $4.75 billion.

It was a pretty nice return for Vista Equity partners, which purchased Marketo in May 2016 for $1.8 billion in cash. They held onto it for two years and hauled in a hefty $2.95 billion in profit.

We published a story last week, speculating that such a deal would make sense for Adobe, which just bought Magento in May for $1.6 billion. The deal gives Adobe a strong position in enterprise marketing as it competes with Salesforce, Microsoft, Oracle and SAP. Put together with Magento, it gives them marketing and ecommerce, and all it cost was over $6 billion to get there.

“The acquisition of Marketo widens Adobe’s lead in customer experience across B2C and B2B and puts Adobe Experience Cloud at the heart of all marketing,” Brad Rencher, executive vice president and general manager, Digital Experience at Adobe said in a statement.

Ray Wang, principal analyst and founder at Constellation Research sees it as a way for Adobe to compete harder with Salesforce in this space. “If Adobe takes a stand on Marketo, it means they are serious about B2B and furthering the Microsoft-Adobe vs Salesforce-Google battle ahead,” he told TechCrunch. He’s referring to the deepening relationships between these companies.

Brent Leary, senior analyst and founder at CRM Essentials agrees, seeing Microsoft as also getting positive results from this deal. “This is not only a big deal for Adobe, but another potential winner with this one is Microsoft due to the two companies growing partnership,” he said.

Adobe reported its earnings last Thursday announcing $2.29 billion for the third quarter, which represented a 24 percent year over year increase and a new record for the company. While Adobe is well on its way to being a $10 billion company, the majority of its income continues to come from Creative Cloud, which includes Photoshop, InDesign and Illustrator, among other Adobe software stalwarts.

But for a long time, the company has wanted to be much more than a creative software company. It’s wanted a piece of the enterprise marketing pie. Up until now, that part of the company, which includes marketing and analytics software, has lagged well behind the Creative Cloud business. In its last report, Digital Experience revenue, which is where Adobe counts this revenue represented $614 million of total revenue. While it continues to grow, up 21 percent year over year, there is much greater potential here for more.

Adobe had less than $5 billion in cash after the Mageno acquisition, but it has seen its stock price rise dramatically in the last year rising from $149.96 last year at this time to $266.05 as of publication.

The acquisition comes as there is a lot of maneuvering going on this space and the various giant companies vie for market share. Today’s acquisition gives Adobe a huge boost and provides them with not only a missing piece, but Marketo’s base of 5000 customers and the opportunity to increase revenue in this part of their catalogue, while allowing them to compete harder inside the enterprise.

The deal is expected to close in Adobe’s 4th quarter. Marketo CEO Steve Lucas will join Adobe’s senior leadership team and report to Rencher.

It’s also worth noting that the announcement comes just days before Dreamforce, Salesforce’s massive customer conference will be taking place in San Francisco, and Microsoft will be holding its Ignite conference in Orlando. While the timing may be coincidental, it does end up stealing some of their competitors’ thunder.

Aug
24
2017
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Marketo picks Google Cloud to migrate from on-prem data centers

 Google got a much-needed win today when Marketo, the marketing automation platform, chose Google Cloud Platform (GCP) to migrate its entire on-prem operation. The partnership will extend beyond hosting with Google also providing deeper integration with GSuite. Google says that should enable Marketo customers to generate content and communicate with customers directly from the Marketo… Read More

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