Email is quite profitable, as it turns out. Or rather, email communications software is.
Today, Toronto-based ContactMonkey, a platform that lets companies create, send and track internal comms from Outlook and more, announced that it raised $55 million in a Series A round led by Updata Partners.
It’s a sizable round from a single VC, so what warranted the hearty vote of confidence? Perhaps ContactMonkey’s profitability — or the fact that the company was bootstrapped up until recently.
Said Updata partner Braden Snyder in a statement: “As employers continue to seek ways to better engage and retain talent, ContactMonkey is filling a key void in the market with their robust and user-friendly solution. In the remote work era, we believe that companies must continue to find avenues to best engage with their employees and communicate with them in ways that truly resonate. ContactMonkey powers this type of communication.”
ContactMonkey founder and CEO Scott Pielsticker said that the new cash will be put toward expanding in international markets and doubling the size of ContactMonkey’s 80-person team, with a particular emphasis on building out ContactMonkey’s sales and marketing organizations.
“Our reason for raising money now is simple,” Pielsticker told TechCrunch in an email interview. “We see tremendous demand in the market and around the world for internal email platforms, as companies look to improve how they communicate with employees. We believe we’re well suited to meet this demand.”
Image Credits: ContactMonkey
Prior to ContactMonkey, Pielsticker started Blueback, a London-based taxi car company. ContactMonkey came about after Pielsticker says he saw clear demand in the market for a platform to help businesses engage employees through email.
“Our mission became to create a beautiful product for teams to leverage that’s user friendly and that has key data and insights to improve internal communications,” Pielsticker said.
“Beautiful” and “user friendly” is relative, of course. But ContactMonkey indeed delivers on the promise of connecting staffers — and managers — via email. The platform integrates with Outlook, Gmail or Teams, as well as SMS and human resources information systems like Workday and ADP, assisting in orchestrating things like company announcements, alerts and updates.
Through engagement analytics, ContactMonkey allows users to build segmented employee lists, collect feedback and view metrics such as click-through rates, open rates and read rates.
“Today, there are different ways that companies communicate with their employees,” Pielsticker said. “They may send emails that have no insights into engagement, so companies don’t know whether employees opened the email — much less whether it resonated with them. Or they may use a marketing or sales platform to send emails. These solutions may have some data insights, but they run into problems as well, from delivery issues to unsubscribe buttons to a lack of enterprise-level security. We provide a third avenue.”
ContactMonkey has around a thousand customers, and Pielsticker says that the base is on a steady uptick. While he admits that ContactMonkey isn’t alone in the market for managing internal emails (see: Staffbase, Mailchimp), he argues that the investment from Updata puts it in a solid position to combat the challengers.
“COVID-19 had a positive impact as employers looked to better communicate with their remote workers and maintain company culture. We think this investment will provide us with the runway needed to deal with any market headwinds — though we do not see the slowdown in our industry as much as the wider tech industry is feeling it.