Confusing or complicated website and software design can cost companies a lot in lost traffic and business, but for one startup, it’s a problem that is proving to be lucrative. WalkMe, which has developed a platform that integrates with existing software and sites to help guide people through using them — used by companies like eBay, Salesforce and Expedia — has raised another $25 million in an oversubscribed round of funding.
Dan Adika, CEO of WalkMe, says the Israeli-founded startup will be using the funds to expand its operations in the U.S., as well as for acquisitions in areas like analytics to build out more aspects of its platform.
This Series D was led by Greenspring Associates — the group that invests in other VC funds like Accel, CRV, NEA and Scale Venture Partners; as well as directly in a range of cloud-based businesses like Alibaba, JW Player, Cloudflare and more. Others in this round included existing investors Scale Venture Partners, Giza Venture Capital and Gemini Israel Ventures.
The funding brings the total raised by WalkMe to $42.5 million, at a valuation that is believed to be in the lower hundreds of millions, specifically under $500 million. The company is not yet profitable, intentionally so as it continues to go forward in “growth mode,” Adika tells me.
There have been some acquisition approaches, but the plan for now is to keep WalkMe independent and take it public in about two years’ time. “We are not going to stay private for more than a year or two,” Adika says.
Over the years, there have been some big steps taken to make websites and apps more intuitive and easier for average people to use, along with more of a spotlight on the topic in general, yet we still regularly get hit with crimes against design. That’s where WalkMe comes into the picture.
WalkMe provides a platform that plugs into existing products, and a business can use it to create their own ideal walk-throughs the service in question. (It’s a little like the little animated assistant Clippy in Microsoft Word in that respect.) The service is charged in buckets, Adika tells me, based on how much the site or software is used.
With many implementations aimed at cutting down the usage of live customer support, the cost-savings can be signficant. One minute of support by phone can cost a company $4, and Adika claims that using WalkMe can bring down the number of support calls by 31 percent.
Part of the success that WalkMe has seen to date has been because of a semi-pivot.
Last year, around the same time that WalkMe raised an $11 million round, the company decided to open a new front in its operations, targeting enterprise services and specifically sites and software for the B2B market.
“We made a switch to B2B and found that there is a much larger opportunity in the enterprise market,” he says. Today, the company’s business is split roughly between three areas: 40 percent for internal help assistance (ie its B2B business); 30 percent for external customer care (its original, legacy product); and 30 percent for driving actions and adoption on sites.
The fact that it has diversified across different categories could also help it weather competition. Others like Iridize and Whatfix also attempt to tackle how-to and onboarding issues from different angles.
Going ahead, while WalkMe may not be shopping itself around, it will be looking to make an acquisition of its own to continue expanding its business. Specifically Adika says that company is looking at other startups that have built out ways of improving UX, as well as business intelligence startups.
WalkMe already provides some analytics to its customers based on how its online assistants are being used and interacted with; the idea will be to develop that into an even more complete product that can help those customers make bigger decisions on how it presents and sells products in the future.
“If you put bananas next to milk and cereal in a shop, you can sell more cereal and bananas,” Adika says. “You can apply the same idea to what we are doing and what our customers can learn. We want to find patterns in the wisdom of crowds. That can have a big impact on a business.”