Optimizely, a Y Combinator-incubated startup that helps companies A/B test different versions of their websites, has raised $28 million in Series A funding.
That would be a sizable Series A for most startups, but it’s a particularly big step for Optimizely, which had only raised $3.2 million thus far. The last round was announced a year ago, but the company didn’t disclose the amount at the time.
Co-founder and CEO Dan Siroker told me that despite the relatively small amount of funding, the company has reached an annualized revenue run rate in “the double-digit millions,” and that revenue is growing by 400 percent per year. It also signed up some high-profile customers, including the Obama and Romney 2012 presidential campaigns. (Siroker was Obama’s director of analytics in 2008.) And you can see Optimizely’s growth versus competing products among the top 10,000 Alexa websites in the chart that Siroker sent me (using data from BuiltWith) below.
The round was led by Benchmark, with participation from Bain Capital Ventures and Optimizely’s existing investors Battery Ventures, InterWest Partners, and Google Ventures. Benchmark’s Peter Fenton (whose past investments include Yelp and Twitter) is joining the Optimizely board of directors. Siroker said Fenton is the first outside member; until now, the board was just Siroker and his co-founder Pete Koomen. So they auditioned VCs in an unusual way — by holding “mock board meetings” with potential investors.
When I asked whether Siroker had planned to raise such a big round, he said, “We went into it knowing it’s possible that we would never spend this money.” However, he said the funding gave the company an opportunity to be “really ambitious” on a number of fronts.
First of all, it’s taking its first steps towards international expansion. Optimizely opened its first European office in Amsterdam last year, and it plans to launch in nine languages, representing 36 countries, over the next quarter. Siroker said the team chose those languages (it isn’t saying which ones yet) based on where it has already found customers.
The company is also moving into a new 56,000 square foot San Francisco office. Optimizely currently has 68 employees, and the new office has room for more than 450, Siroker said, but he still hopes to outgrow it eventually.
Other areas where Siroker plans to invest include sales and marketing, plus infrastructure and customer support. The big vision here, as he has told me before, is to expand Optimizely beyond testing, turning it into the platform that allows websites to personalize themselves for every visitor. The company already allows customers to provide a different experience to different visitor segments, but Siroker wants to go further.
“It’s going to be easier for people to do that going forward,” he said. “We’re going to be enabling businesses to show exactly the right thing to the right person at the right time.”