Mobile Analytics Company Mixpanel Raises $65M Round With An $865M Valuation

Mixpanel, which describes itself as offering “the most advanced analytics platform ever,” is announcing that it has raised $65 million in new funding.

That round comes entirely from previous investor Andreessen Horowitz, and co-founder/CEO Suhail Doshi told me that it values Mixpanel at $865 million (the valuation includes the new cash).

Mixpanel was incubated by Y Combinator and launched in 2009. As Doshi (he’s the middle guy on someone else’s shoulders in the team photo above) tells it, the company decided a year later to make “a big bet” by focusing primarily on mobile.

To be clear, the technology works with websites too, but Doshi said the mobile focus gave Mixpanel on edge over the big players in analytics, who were slow to respond to the new opportunity. At this point, he said the company has become “king of the mobile analytics enterprise mountaintop.” (If that sounds like startup hyperbole, albeit fairly specific startup hyperbole, I will note that Mixpanel is usually the first name that comes up when I talk to people about this market.)

The company says it analyzes 34 billion actions every month. That’s a bit of an abstract number — more concretely, Doshi said Mixpanel has been profitable since 2012. So even before the new round, the company had more than $20 million in the bank. (It previously raised $12 million in venture funding.)

Mixpanel also recently passed the 100-employee mark.

The company says it can help customers answer detailed questions about user behavior, like, “Of our paying customers, how many arrived from a Google ad, live in Switzerland, and haven’t logged in for a month?” The additional funding will allow it to experiment with new features and technology in an aggressive way, Doshi said: “I want to double down on risk, I want to double down on ambition, I want to double down on our product.”

For one thing, he wants to invest in making the platform better at making predictions for the future, which he described as “combining data science with AI.” He also plans to do more to make Mixpanel data usable by non-data scientists.

As the company pursues new directions, Doshi recalled warning investors, “We’re going to do things that are going to fail and you have to be okay with it.”

To illustrate how the company has experimented and failed in the past, he pointed to the visualization tool Flow, which launched in 2012 and was quietly shut down after six months. However, Doshi said the experience helped the team understand the difficulties in creating something that’s too isolated from the core Mixpanel platform, a lesson they incorporated into the subsequent, successful launch of a product focused on user data. (The “People” product now accounts for 20 percent of the company’s revenue, Doshi said.)

I’d also heard that Mixpanel had some trouble keeping customers around for more than a year, so I asked about it in a follow-up email. Doshi told me:

We measure ourselves very harshly on customer retention. For the past 5 years we’ve offered month to month subscriptions and work with a ton startups. That segment will have the highest churn naturally. As we get larger and get more annual subs, work with larger customers, and build out a larger customer success team we will see that churn rate go down. You have to be ok with a higher rate of churn when you’re trying to dominate a market and you go bottom up instead top down. We have a ton of customers who have been with us for over a year: big and small.

As for why he didn’t bring on additional or new investors, Doshi sang Andreessen Horowitz’s praises, telling me that the firm “believed in us at a time when other people were passing on us.” And yes there’s a lot of hype around the firm, but he said in this case, “A lot of it is true.”

Update: And here’s the pitch deck Mixpanel used to raise the new round, albeit with some of the more sensitive numbers blacked out.