Contentsquare closes mammoth $600M seed round as customers demand digital analytics – TechCrunch
While the pandemic has prompted companies to digitize much of the way they do business, not all brands have made it through the pivot. In some cases, this has cost them dearly. According to Couchbase, companies wasted an average of $4.12 million on failed, delayed, or scaled-down projects in 2020. The same survey found that more than four-fifths of companies — 82% — were prevented from pursuing development projects. digital transformation because of the personnel, resources and know-how required.
The consequences of delayed or wasted projects often extend beyond money – think delaying strategic goals. That’s one of the reasons Jonathan Cherki founded Contentsquare, a platform that allows companies to track online customer behavior to inform digital strategies.
“While studying at ESSEC in France, I became fascinated by the gap between the digital experiences brands thought they were delivering and what consumers were actually getting,” Cherki told TechCrunch in an email interview. “I believe knowledge is power, and my mission is to change the way businesses work by creating a data-driven culture accessible to everyone. Ultimately, I want to help create a world where every digital interaction improve our lives.”
Cherki started developing the technology that would become Contentsquare while he was a student. Since 2012, he has been CEO, moving the company’s headquarters from Marseille to New York in 2017.
Today, with 17 offices around the world and more than 1,000 corporate clients, including BMW, Giorgio Armani, Samsung, Sephora and Virgin Atlantic, Contentsquare has grown into a giant. Its funding reflects this – the company announced today that it has closed a $600 million Series F funding round at a valuation of $5.6 billion, exactly double the valuation of Contentsquare last May ($2.8 billion). The tranche is split between $400 million in equity and $200 million in debt. But that’s still a remarkable amount given the current economic climate and considering that Contentsquare raised $500 million just a year ago.
According to Cherki, justifying the infusion, which was led by Sixth Street Growth, was further expansion. He says the new funds will be invested in R&D efforts, geographic and market growth and the launch of no less than three new products over the next 12 to 18 months. Hiring will be another focus as Contentsquare’s workforce tops 1,500.
Contentsquare remains focused on its original bread and butter, i.e. web and app analytics. The platform uses algorithms to analyze digital interactions and generate insights that, in Cherki’s words, help businesses “access a deeper understanding” of their customers.
The company’s technology records user interactions in web pages and applications and translates them into recommendations to help guide a company’s content decisions. Using algorithms, the platform attempts to automatically uncover areas of revenue and experience improvement, providing metrics and “session replays” that reconstruct the steps individual visitors have taken. on websites tracked by Contentsquare.
Contentsquare also provides an API that customers can use to integrate the platform with web applications and other systems, such as personalization engines.
“Our solution analyzes 3.2 trillion customer interactions per month on sites that process $2.5 billion in transactions daily. More than one million websites worldwide, across all verticals, use Contentsquare today,” Cherki said. “The pandemic has accelerated a massive shift to digital, which has exposed gaps in the online experience and confirmed customer experience as a key differentiator. The current macroeconomic climate has only further underscored the importance of having an exceptional customer experience for businesses of all sizes, across all verticals.
While business is booming — Cherki says annual recurring revenue is in the “several hundred million dollars” range — Contentsquare is facing headwinds, including growing regulatory pressure. In the United States and abroad, policymakers are considering restrictions on the amount of data advertisers can collect for targeting purposes, making some analytics products less appealing. Anticipating this and responding to consumers’ growing appetite for enhanced privacy protections, vendors such as Apple have released privacy features such as app tracking transparency that threaten to disrupt the behind-the-scenes mechanisms of many trackers.
Cherki says Contentsquare has prepared for this future, launching what it claims is one of the industry’s first “cookie-free” customer experience analytics products last year. (In the web context, “cookies” are text files that websites use to monitor visitors and remember specific information about them, such as login data.) its machine learning and small business ambitions and medium enterprises.
Elsewhere in the organization, Contentsquare operates a nonprofit foundation to help promote digital accessibility in areas such as education and corporate social responsibility. In a related but transparent for-profit effort, Contentsquare launched an incubator to help fuel the growth of other startups in digital analytics.
It remains to be seen whether the measures are sufficient to fend off increased competition in the area of digital customer analytics. Quantum Metric, a platform that helps companies improve their websites and apps by collecting user feedback, raised $200 million last January at a valuation of over $1 billion. In August 2021, Atlanta, Georgia-based FullStory snagged $103 million at a $1.8 billion valuation for its code analysis suite for digital customer experiences. Although smaller, Airkit and Glassbox have raised tens of millions to develop products that optimize unique customer journeys across web and mobile apps.
Some surveys, however, suggest that there is no shortage of potential new customers. Ninety-six percent of executives responding to a 2022 survey by Precisely said they have invested or plan to invest in data integration, integrity, and enrichment technologies for customer experience in the coming months.
“Resources and budget are leaner than before and this poses challenges for businesses. At the same time, customer experience remains the key differentiator, which is why we strive as a business to help our customers to succeed by empowering them with the customer insights that will help them create great experiences every time and thrive,” Cherki said. “As we expand into more and more markets, we have many competitors , but Contentsquare’s strength is to offer a one-stop experience analytics platform. Our mission is to make the digital world more human, enabling businesses to access a deeper understanding of their customers, take smart action at scale, and create experiences built on trust.
Previous Contentsquare investors include SoftBank Vision Fund 2, BlackRock, Canaan Partners, Highland Europe, and Eurazeo, among others. The company’s war chest is $1.4 billion.