There are many companies whose mission is to solve unsuccessful e-commerce instances such as abandoned carts, but Rokt is doing the complete opposite. This NYC startup helps companies keep momentum and customer intent up throughout the transaction moment. Rokt’s machine learning platform allows companies to drive the next best action for each person on an individual basis. Many companies in the retail, ticketing, B2B, and travel sectors have incorporated Rokt’s platform into their e-commerce offerings.
AlleyWatch sat down with Rokt CEO Bruce Buchanan to learn more about the power of the transaction moment and the company’s decision to raise funding. This round brings the company’s total funding to $82M across three rounds, since its fonding in 2012.
Who were your investors and how much did you raise?
We are very excited to close our $48M Series C, led by global investment firm TDM Growth Partners, including additional capital from existing investors including John Ho (Janchor Partners).
Tell us about the product or service that Rokt offers.
Rokt makes e-commerce smarter, faster and better for global clients including Live Nation, Staples, Groupon, GoDaddy, Expedia and Wells Fargo. Our proprietary technology, machine learning, and AI, unlocks value in every transaction through relevancy.
What inspired you to start Rokt?
During my time as Group CEO at Jetstar, one of the challenges we had was how to improve our customer experience and stay a step ahead of the competition in the value we generated from the core business. Because we were a low budget airline, which focused on direct to consumer, we needed to manage customer experience and sales directly. We found that if we could work out what products and services to show to a customer, we could double the profitability of the airline. Rokt delivers against that need.
Rokt is focused on making the Transaction Moment™ smarter, faster and better. Our proprietary technology enables partners to intelligently manage various commercial and customer engagement objectives by utilizing machine learning to drive the next best action for each person. This delivers better experiences for customers and more revenue for the bottom line. Rokt’s e-commerce partners across various industries, including retail, ticketing, B2B and travel, have a wealth of contextual and demographic insights to leverage throughout a customer’s purchase. Throughout the Transaction Moment™, Rokt’s machine learning utilizes these insights to determine the most relevant offer and message to present at the optimal time to each individual person.
What market does Rokt target and how big is it?
Rokt enables global brands across various industries, including retail, ticketing, travel, D2C, and B2B, opening up a marketplace for digital advertisers. The global digital ad spend is expected to be $130B in 2019.
Who do you consider to be your primary competitors?
Rokt uniquely solves many challenges in the transaction moment and opens up many opportunities – the only competitor for us is that a business doesn’t know we exist. No other company offers the solution we do.
What’s your business model?
Rokt’s e-commerce partners deploy our technology inside their transaction moment, where they use the platform to drive revenue through third-party advertisers and we split the revenue. We also have a number of SaaS products including Rokt Calendar.
What was the funding process like?
The journey to our Series C was particularly unique. We weren’t under pressure to raise money – we are profitable and closing out our strongest year on record with over US$100M in revenue. Our primary goal was to find a long-term strategic partner that will allow us to accelerate the next generation of e-commerce technology to deliver our clients smarter solutions and better experiences for their customers.
We found this in TDM. I got to know TDM and see their depth of care as investors as we both serve as directors on the board of Guzman y Gomez (GYG).
What are the biggest challenges that you faced while raising capital?
Managing how to be polite about rejections – as we are a profitable business (rare in tech we know!) we are grateful that our biggest challenge was managing rejections from potential partners we didn’t think were the right fit for Rokt.
What factors about your business led your investors to write the check?
Our leadership team, our vision, our performance to date including our profitability and of course the size of the opportunity we have ahead.
What are the milestones you plan to achieve in the next six months?
Bringing in more brilliant people – in particular, right now we’re very focused on building out our engineering team in Boston, following our acquisition of B2B marketplace, OfferLogic. Across all teams we are always on the hunt for the brightest and most talented people – that’s what drives our results.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
My advice is actually to the businesses and advisors that have made it past the early days of being a startup without outside funding. Remember that we all started out as the little guys and the lessons we know now can serve immense value for budding entrepreneurs. Network with startups, mentor first-time founders – help them not make the same mistakes we most likely did. Helping the startups of tomorrow is how we ultimately drive change in society.
My advice is actually to the businesses and advisors that have made it past the early days of being a startup without outside funding. Remember that we all started out as the little guys and the lessons we know now can serve immense value for budding entrepreneurs. Network with startups, mentor first-time founders – help them not make the same mistakes we most likely did.
Where do you see the company going now over the near term?
We have many exciting plans in the pipeline including opening new markets around the globe. We will continue to accelerate research & development so we can continue driving innovation in e-commerce for the largest e-commerce companies in the world, powering distributed commerce, and giving marketers new insights into how to drive down customer acquisition costs.
What’s your favorite restaurant in the city?
Supper in the East Village – it is a family favorite, our 5 kids fight over the lemon pasta, meatballs, and Caprese salad. They also have a few great Brunellos on their wine list! We all love it equally!