A startup that’s built cross-channel growth marketing platform — used by businesses to capture customers across whatever digital media they happen to be using — is today announcing funding to do some growing of its own. Iterable — which uses email, push and in-app notifications, SMS and other sources to interact with users and deliver them targeted, personalised marketing messages — has closed another $60 million in funding, a Series D that it’s going to use to continue scaling its business into more markets (it’s recently expanded in Europe with a London office), and with more hiring.
“This is about being prepared because of the uncertainty in the wider market,” said co-founder and CEO Justin Zhu said in an interview. “We are not sure what might happen next year.” The bigger trend in marketing tech is around consolidation and the building of “marketing clouds” by large players like Adobe and Salesforce, so it’s notable that Zhu said that while Iterable is continuing to grow — it has the startup’s focus will be on remaining independent and turning profitable.
“It’s about getting to breakeven and then beyond that,” he said.
This latest round, a Series D, is being led by Viking Global Investors — the huge investment firm and hedge fund that has backed the likes of Facebook and security firm Druva, but also a range of biotech and pharma companies — with participation from previous investors CRV, Index Ventures, Blue Cloud Ventures, Harmony Partners, and Stereo Capital.
The company has now raised $140 million in total. Zhu described the valuation as a “very healthy increase,” and while he is not talking specific numbers, Iterable’s Series C came in at $275 million post-money, according to PitchBook, which makes this latest round definitely higher than $325 million. (We’ll keep trying to get a more specific number.)
A lot of marketing startups have their beginnings in the world of — no surprises here — marketing, which is to say that of the people who have had direct experience in dealing with the pain points of how legacy marketing products work, some of the more enterprising go on to found companies to try to solve those problems.
Iterable has a bit of a different origin story in that its founders come from technical backgrounds. Zhu co-founded Iterable with Andrew Boni six years ago, but before then, both of them cut their teeth as engineers, at Twitter and Google respectively (and they are both young: they started the company while in their twenties, and this is only Zhu’s second job out of university).
It was at Twitter that Zhu identified a gap between the amount of data that a company has on users, and how it’s not used as well as it could be to grow that company’s business, especially when that business is not already a tech company — and sometimes, even when it is: Twitter has yet to sign on as an Iterable customer, but Square, the other business led by Jack Dorsey, is.
“There are a lot of great ideas and things that became experiments at Twitter,” he said, “but I noticed that only a very few companies — the biggest, most qualified technology companies — could execute a variety of different growth marketing efforts. Many most likely don’t have the right people or experience.”
As Zhu describes it, there are not that enough people building significant innovations in how marketing works, because they lack the technical chops to do so (they instead come from development and marketing backgrounds).
That challenge further has become a little more complicated in more recent times, for another reason, which is that we’re in a moment where it feels like marketing is the bad guy.
The rise of stronger data protection and privacy rules, for example with GDPR in Europe, plus consumers’ wider awareness and subsequent have led to a collective rejection of too much tracking of their online activity.
The idea with Iterable — as its name implies — is that you’re given a platform to iterate, to try out lots of different approaches across a range of different platforms, leveraging data that you already have and can use, or that you are able to get from users as part of the campaign, to build out your relationships and engagement, to see what works and what definitely does not.
This can either be to bring in more eyeballs and visitors (in the case of a company that, say, offers ‘free’ services and makes money on advertising), or more straight sales by way of offering discounts, insights on offers for things you might want or other incentives to buy things.
The company’s customer list includes companies like Zillow, Priceline Care.com and Fender, which speaks to how it targets companies that span not those who are digitally native businesses (but not necessarily the newest of the pack), but also those that are legacy companies that need to figure out how to leverage digital channels better to continue connecting with more, newer, and younger audiences.
There are upwards of 7,000 companies in the wider space of marketing technology today, Zhu estimates, which speaks to just how much more activity we’re likely to see in this area: the big fish will eat the tastiest smaller fish, while other fish will not manage to grow and will disappear.
“Martech is a crowded space where we see a large number of small startups offering point solutions, and only a few achieving true scale to start competing with the incumbent marketing clouds like Oracle and Salesforce .” said Murat Bicer of CRV. “These kind of market dynamics always drive further consolidation, so it makes sense for Iterable to have a war chest ready as opportunities arise.”
But equally, we’re also seeing an interesting evolution, where paths are emerging for the most promising of the lot to carve out independent places for their particular services, independent of the biggies (en route to becoming biggies themselves, perhaps).
For example, the data warehousing startup Snowflake — covering one of the big components that martech efforts need to work — is now valued at around $4 billion and is showing no signs of slowing down.
That’s a path that Iterable wants to follow, too, with this round to help it get there.
“We live in the world of ‘best of breed’ coming together, which for us is about partnering with the best analytics and data warehousing companies,” Zhu said. “There are many options today that don’t entail getting acquired by a bigger player.”