French startup Algolia raised $1.2 million as an extension of the company’s existing seed round to turbocharge your website’s search engine. It brings the total funding of the startup to $2.8 million. The round extension was led by Storm Ventures, with angels coming from Box, Eventbrite, Google, Microsoft and Stripe. Chrisoph Janz of Point Nine Capital is also joining the board.
“They wanted to raise another million dollars to accelerate growth,” Jason Lemkin of Storm Ventures told me in a phone interview. “They went from no to 200 customers this year. They have leads and the ability to start tilting that market.”
While Lemkin, the former CEO of EchoSign, seems to be very bullish about Algolia, he’s also realistic. What he sees in the startup is its potential. “The financial numbers are not there yet,” he said. “But it’s easy to see how it’s going to generate millions of dollars even though it’s not true yet.”
Previous investors include 500 Startups, Alven Capital, Index Ventures and Point Nine Capital. The company was also accelerated by Y Combinator and TheFamily.
It’s easy to see how it’s going to generate millions of dollars even though it’s not true yet. Jason Lemkin
When Algolia first started, the team had a lot of experience in search engine. Some engineers previously worked at Exalead, a search engine built in France. They built a killer real time technology for hosted search engines, but still had to sell it.
At first, Algolia provided a $99 mobile SDK to replace your app’s search engine. It was a nice idea. But it had much less potential than replacing the search engine on major and influential websites, such as Vestiaire Collective, USA Today’s Reviewed.com, Hacker News or Product Hunt. Making this transition from a cheap tool to an essential solution for major websites is not instantaneous either.
“It just takes time,” Lemkin said. “Adobe recently signed a new EchoSign customer who I had pitched 7 years ago.”
Algolia recently launched analytics features to make it a more full-fledged solution. This kind of updates will appeal to bigger clients and make Algolia worth much more than it currently is.
According to Lemkin, this is key to Algolia’s future prospects. “And if they can get to a couple of thousand customers by the end of the year, that will be a huge success,” he said.