If you want to know what to sell your first step is to get data on your potential buyers. But where do you get such valuable information? The answer is mParticle. With the ability to collect data from mobile users, they can fast track your business right to the top if used correctly. With companies such as Spotify, SeatGeek, AirBnB and a lot more already trusting mParticle, you’ll be in good company!
Coming off a round of funding CEO Michael Katz talks with AlleyWatch about the funding and the shifts that the new round will cause internally.
Who were your investors and how much did you raise?
This was our Series A, we raised $15M and it was led by Social Capital with participation from existing investors including Bowery Capital, Eniac Ventures, and Golden Ventures.
Tell us about your product or service.
We a customer data platform built for mobile and connected devices. We automate the process of collecting and connecting customer data to the ecosystem of marketing, analytics, and data warehouse partners that our clients use to run their respective businesses.
What inspired you to start the company?
This is the second company that I have started with my brother Andrew (our CTO), and second company I have been part of with our other co-founder Dave Myers (our COO). Our last company, interclick, was bought by Yahoo in 2011 because of the innovative data platform that we built, after leaving Yahoo we were hungry to build again.
More specifically, we saw a number of trends across the intersection of mobile, data, and SaaS that we felt like we could solve. Based on our previous experience, we felt like we had a great understanding of the solution that marketers and developers would need as this ecosystem evolution continued. This is what we set out to build this back in 2013, fast forward 3 years and here we are, right where we want to be.
How is it different?
It’s different than the status quo as it provides a solution to automate the highly manual and redundant process of implementing various software development kits (SDK’s) into app by leveraging server-side API’s rather client side code. The end result provides economies of scale from a single engineering effort that empowers teams to move faster and drive growth more efficiently. Simply put, we make it easier for marketers and engineers to do their jobs.
What market you are targeting and how big is it?
The broader total addressable market that we serve is the app economy. The app economy refers to the range of economic activity surrounding mobile apps and encompasses the sale of apps, revenue transacted through apps, ad revenue generated by apps, and app software development services and products.
It’s worth noting that overwhelmingly revenue in the app economy is being driven by ecommerce. We’ve seen research that pegs the mobile ecommerce market at $300 billion in revenue in 2015, more than every other source of app revenue combined. In many ways, the app economy is coming to mean the future of ecommerce.
mParticle is more narrowly focused on these companies that have adopted a mobile-first or mobile-dominant strategy. These include:
- The largest mobile-first businesses whose business model relies on users transacting with them via mobile apps such as gaming, the on-demand economy, and premium mobile services.
- Traditional large businesses whose customers increasingly transact with them via apps such as ecommerce, subscriptions/streaming media, and travel/hospitality/loyalty.
What’s your business model?
We charge an annual licensing fee for access to the platform based on the number of monthly active users (MAU’s)
What are users saying about your product?
Our clients like us, you can see some of the testimonials on our site. We are solving a pain point that has become universally acute and we have seen 100% client retention in the first couple years. The numbers speak for themselves.
What was the funding process like?
It was a lot different than when we raised our Seed round. The seed was all about the early idea and the background of the founders. The Series A was mainly about metrics, our plan to make things repeatable and scalable, and the greater vision. The process was relatively smooth for us since we had the numbers to back up the story and the momentum to carry it forward. Social Capital was our top choice all along and couldn’t be more excited to partner with them.
What are the biggest challenges that you faced while raising capital?
The biggest challenge is always keeping an eye on the business while shifting much of the focus to the fundraise process. With any challenge however, there’s always opportunity. The process allowed us to step back and really think about the business and the broader opportunity at a really high level, which is easy to put off when you’re consumed in the day to day.
What factors about your business led your investors to write the check?
I believe there are three (3) factors that made us an attractive investment. First, nobody else is doing what we’re doing. We saw a trend early on and have capitalized on an incredible opportunity. Second, we offer (at least) a 10x solution to our clients. Integrating partners through mParticle is at least 10x easier for clients rather than continuing to repeat the same manual setup. Third, and while early, the momentum of them business plus the level of customer engagement on the platform is really promising.
What are the milestones you plan to achieve in the next six months?
Our goals over the next six months center around hiring, and shifting from doing things that aren’t scalable to building the machinery which allows us to make as many areas of the business as predictable and repeatable as possible. We have stormed the beach, and now its time to organize the troops to execute a more complicated plan of attack. ]
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
We’re New Yorkers, and like anything else, its all about great people who are also dynamic and resilient. From the beginning we kept building, if things weren’t going as well as we hoped we would adapt and evolve our tactics. This team is fluid, dynamic, and multi-dimensional. We’re at the point now where we are very confident in our approach because we know how hard we worked for all this. When I see companies struggle, often times I see rigid, robotic teams and one-dimensional approaches. My advice would be to keep moving, learning, and evolving.
Where do you see the company going now over the near term?
The vision stays the same, the tactics continue to evolve as we get more information, either from clients or other marketplace dynamics. Overall, we’re focused on building out our marketplace to make it as easy as possible to connect apps and app services. We have a number of key hires to make, and an aggressive roadmap that we’re pursuing.
What’s your favorite restaurant in the city?
Tough to say my favorite but my top 3 are Carbone, Paulie Gee’s pizza in Greenpoint, and Sushi Nakazawa.