QuBit, a big-data startup whose analytics platform helps e-commerce sites with customer personalization, is today announcing that it has raised a Series A round of funding — $7.5 million led by Balderton Capital with participation from existing angel investors.
As part of the deal, general partner Bernard Liatuad — who founded and sold Business Objects to SAP for $6.8 billion — will join QuBit’s board.
The London-based company, which was founded by four ex-Googlers in 2010, may be best known for OpenTag, a cloud-based product that lets sites manage tags from multiple analytics, marketing and ad services from one place. The funding will be used to continue to develop that, as well as a new larger SaaS analytics platform, launched just this week, and to make a stronger push into the U.S. market and the rest of Europe.
Graham Cooke, QuBit’s America CEO and one of the co-founders, says that the four ex-Googlers chose London as its initial base because — from their experience at Google in product, marketing and engineering — they saw that the UK was one of the most acute markets when it came to e-commerce. Proportionately, people spend more money and time online here than in other countries, but sites here also grapple with some of the worst conversion problems, too — meaning they get a lot of visits that aren’t converting to sales.
“We decided that if we could crack the problem here in the UK, we could crack it anywhere,” he said.
So far, it’s delivered on the UK part of this. This year, company says that it has seen revenues grow by 300%, and they have added 1,000 customers to its analytics platform, which processes data from tens of millions of visitors every month. Some of the biggest are the Arcadia Group (owners of high-street juggernaut TopShop, among others); John Lewis; the BBC and Staples. Meanwhile, there are over 1,200 enterprises using OpenTag.
And with not one but four Google alumni on the founding team, QuBit also has continued to keep some connections to the search giant. OpenTag integrates with Google’s analytics services and Google’s own, free tag-management product, Tag Manager, which we covered in more detail when it launched here.
The funding in QuBit also underscores a couple of wider trends. First, there is the emphasis on big data, and the need for companies to start to get smarter about how they (responsibly and non-abusively) use all the information that they amass about their customers. And second, on the VC side, it looks like big data may be one of the islands is not getting submerged in what looks like a wider capital crunch in startup world.
Cooke says that when QuBit went out to raise money, the company got “a lot of interest.” He attributes part of that to the fact that e-commerce is still growing strong — 15% annually with increases of around 17% around times like the holiday season — and so data that is tied to it will continue to be in demand.
“For us, we didn’t really see the crunch,” he says. “I think we’re different from other categories like gaming where there are questions about longer-term revenue models.”
Liataud agrees. “They’re in a great space. How to optimize customer insights and personalization on websites is something all retailers and online merchants want to do. Right now, they’re doing it with a variety of technologies, some less easy to use, and some quite old. QuBit optimizes conversion and gives great insight on customer traffic, and helps use the data you already have to improve the journey on a website. That’s the holy grail and QuBit has created an interesting approach to get it.”
He also points to the momenum that QuBit has picked up. “Lots of customers are already using the OpenTag technology. They way they acquire customers with their software is quite remarkable.”
Balderton will help with QuBit’s global expansion in part by cross-polinating with other portfolio companies, several of which, like KupiVIP and The Hut, are in the e-commerce space. “For sure, we are going to introduce to our companies to QuBit,” he says. “We already have some that are looking at it and implementing it.”
Last but not least, the other area where QuBit will develop more services is in the area of mobile.
“We think of mobile phones and tablets as just two more screen sizes that you need to include in your customer experience,” says Cooke.
Interestingly, QuBit doesn’t count apps as a significant enough area for now. “E-commerce businesses generate about 95% of their mobile-based revenues from websites, not apps,” he said. “That’s because ultimately e-commerce is about search, not a product.” You can take the guy out of Google, but you can’t the the Google out of the guy.