Algolia has raised a $150 million Series D funding round at a post-money valuation of $2.25 billion. Compared to the Series C round from October 2019, the company’s valuation has more than quadrupled. It means that Algolia is now a unicorn with a valuation above $1 billion.
The company is best known for its search-as-a-service product. It lets you integrate real-time search in your app or website using a developer-friendly API. Using an Algolia-powered search feature feels like using Spotlight on a Mac. Results load with each keystroke and appear in just a few milliseconds.
The company now has over 10,000 customers, including some big names, such as Slack, Stripe, Medium, Zendesk and Lacoste. Right now, the company handles over 1.5 trillion search queries per year — that’s 1,500,000,000,000 if you want to see all the zeros.
Lone Pine Capital is leading today’s funding round. Fidelity Management & Research Company LLC, STEADFAST Capital Ventures, Glynn Capital and Twilio also participated in the round. But that’s not all, some existing investors also put more money on the table, such as Accel, Salesforce Ventures, DAG, Owl Rock and World Innovation Lab.
While the company doesn’t share revenue numbers directly, Algolia says that its annual recurring revenue has increased by 180% year over year.
“The future is API-first — a reality underscored by the growth seen by Twilio, Stripe, Algolia and others in the API economy. A huge part of our success has, and will continue to be, our relentless focus on developers with our PLG strategy — enabling them to build search into their websites and apps, so they create the most relevant and dynamic digital experiences.” Algolia CEO Bernadette Nixon said in a statement. “And we’re excited to continue to solve customers’ problems as we continue to expand beyond search with Algolia Recommend and Predict.”
In addition to its search API, Algolia has expanded to other real-time APIs. For instance, you can provide real-time product recommendations on your e-commerce website with Algolia Recommend. This is part of a strategy to diversify the company’s product offering.
In particular, the company is now trying to analyze the visitor’s intent to predict whether they’re likely to purchase something on not. Companies can then leverage that info to refresh content dynamically, send a push notification, display a special offer, etc.
Originally founded in France, the company has grown tremendously over the past few years. Algolia is now a big enterprise-focused company with a solid business. Last year, its co-founder and CEO Nicolas Dessaigne decided to transition to a non-operational role.
The company has recruited quite a few senior executives over the past 18 months — Michelle Adams (chief revenue officer, formerly of Dropbox), Carlton Baab (chief financial officer, formerly of Alfresco), Piyush Patel (chief business development officer, formerly of Capgemini), Jim Schattin (chief customer officer, formerly of Alteryx), Jason McClelland (chief marketing officer, formerly of Salesforce and Adobe) and Bharat Guruprakash (chief product officer, formerly of Twilio).
As you can see, it’s a long list of talented people, which means that Algolia is focused on building a long-term company instead of building cool technology and optimizing for an acquisition. I wouldn’t be surprised to learn about an IPO down the road.