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Spryker raises $130M at a $500M+ valuation to provide B2Bs with agile e-commerce tools
Businesses today feel, more than ever, the imperative to have flexible e-commerce strategies in place, able to connect with would-be customers wherever they might be. That market driver has now led to a significant growth round for a startup that is helping the larger of these businesses, including those targeting the B2B market, build out their digital sales operations with more agile, responsive e-commerce solutions.
Spryker, which provides a full suite of e-commerce tools for businesses — starting with a platform to bring a company’s inventory online, through to tools to analyse and measure how that inventory is selling and where, and then adding voice commerce, subscriptions, click & collect, IoT commerce and other new features and channels to improve the mix — has closed a round of $130 million.
It plans to use the funding to expand its own technology tools, as well as grow internationally. The company makes revenues in the mid-eight figures (so, around $50 million annually) and some 10% of its revenues currently come from the U.S. The plan will be to grow that business as part of its wider expansion, tackling a market for e-commerce software that is estimated to be worth some $7 billion annually.
The Series C was led by TCV — the storied investor that has backed giants like Facebook, Airbnb, Netflix, Spotify and Splunk, as well as interesting, up-and-coming e-commerce “plumbing” startups like Spryker, Relex and more. Previous backers One Peak and Project A Ventures also participated.
We understand that this latest funding values Berlin -based Spryker at more than $500 million.
Spryker today has around 150 customers, global businesses that run the gamut from recognised fashion brands through to companies that, as Boris Lokschin, who co-founded the company with Alexander Graf (the two share the title of co-CEOs) put it, are “hidden champions, leaders and brands you have never heard about doing things like selling silicone isolations for windows.” The roster includes Metro, Aldi Süd, Toyota and many others.
The plan will be to continue to support and grow its wider business building e-commerce tools for all kinds of larger companies, but in particular Spryker plans to use this tranche of funding to double down specifically on the B2B opportunity, building more agile e-commerce storefronts and in some cases also developing marketplaces around that.
One might assume that in the world of e-commerce, consumer-facing companies need to be the most dynamic and responsive, not least because they are facing a mass market and all the whims and competitive forces that might drive users to abandon shopping carts, look for better deals elsewhere or simply get distracted by the latest notification of a TikTok video or direct message.
For consumer-facing businesses, making sure they have the latest adtech, marketing tech and tools to improve discovery and conversion is a must.
It turns out that business-facing businesses are no less immune to their own set of customer distractions and challenges — particularly in the current market, buffeted as it is by the global health pandemic and its economic reverberations. They, too, could benefit from testing out new channels and techniques to attract customers, help them with discovery and more.
“We’ve discovered that the model for success for B2B businesses online is not about different people, and not about money. They just don’t have the tooling,” said Graf. “Those that have proven to be more successful are those that are able to move faster, to test out everything that comes to mind.”
Spryker positions itself as the company to help larger businesses do this, much in the way that smaller merchants have adopted solutions from the likes of Shopify .
In some ways, it almost feels like the case of Walmart versus Amazon playing itself out across multiple verticals, and now in the world of B2B.
“One of our biggest DIY customers [which would have previously served a mainly trade-only clientele] had to build a marketplace because of restrictions in their brick and mortar assortment, and in how it could be accessed,” Lokschin said. “You might ask yourself, who really needs more selection? But there are new providers like Mano Mano and Amazon, both offering millions of products. Older companies then have to become marketplaces themselves to remain competitive.”
It seems that even Spryker itself is not immune from that marketplace trend: Part of the funding will be to develop a technology AppStore, where it can itself offer third-party tools to companies to complement what it provides in terms of e-commerce tools.
“We integrate with hundreds of tech providers, including 30-40 payment providers, all of the essential logistics networks,” Lokschin said.
Spryker is part of that category of e-commerce businesses known as “headless” providers — by which they mean those using the tools do so by way of API-based architecture and other easy-to-integrate modules delivered through a “PaaS” (clould-based Platform as a Service) model.
It is not alone in that category: There have been a number of others playing on the same concept to emerge both in Europe and the U.S. They include Commerce Layer in Italy; another startup out of Germany called Commercetools; and Shogun in the U.S.
Spryker’s argument is that by being a newer company (founded in 2018) it has a more up-to-date stack that puts it ahead of older startups and more incumbent players like SAP and Oracle.
That is part of what attracted TCV and others in this round, which was closed earlier than Spryker had even planned to raise (it was aiming for Q2 of next year) but came on good terms.
“The commerce infrastructure market has been a high priority for TCV over the years. It is a large market that is growing rapidly on the back of e-commerce growth,” said Muz Ashraf, a principal at TCV, to TechCrunch. “We have invested across other areas of the commerce stack, including payments (Mollie, Klarna), underlying infrastructure (Redis Labs) as well as systems of engagement (ExactTarget, Sitecore). Traditional offline vendors are increasingly rethinking their digital commerce strategy, more so given what we are living through, and that further acts as a market accelerant.
“Having tracked Spryker for a while now, we think their solution meets the needs of enterprises who are increasingly looking for modern solutions that allow them to live in a best-of-breed world, future-proofing their commerce offerings and allowing them to provide innovative experiences to their consumers.”
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Perigee snares $1.5M seed to secure HVAC and other infrastructure
It’s been an eventful fall for Perigee CEO and founder Mollie Breen. The former NSA employee participated in the TechCrunch Disrupt Startup Battlefield in September, and she just closed her first seed round on Thanksgiving, giving her a $1.5 million runway to begin building the company.
Outsiders Fund led the round, with participation from Westport, Contour Venture Partners, BBG Ventures, Innospark Ventures and a couple of individual investors.
Perigee wants to secure areas of the company like HVAC systems or elevators that may interact with the company’s network, but which often fall outside the typical network security monitoring purview. Breen says the company’s value proposition is about bridging the gap between network security and operations security. She said this has been a security blind spot for companies, often caught between these two teams. Perigee provides a set of analytics that gives the security team visibility into this vulnerable area.
As Breen explained when we spoke in September around her Battlefield turn, the solution learns normal behavior from the operations systems as it interacts with the network, collecting data like which systems and individuals normally access it. It can then determine when something seems off and cut off an anomalous act, which may be indicative of hacker activity, before it reaches the network.
She says that as a female founder getting funding, she is acutely aware how rare that is, and part of the reason she wanted to publicize this funding round was to show other women who are thinking about starting a company that it’s possible, even if it remains difficult.
She plans to grow the company to about six people in the next 12 months, and Breen says that she thinks deeply about how to build a diverse organization. She says that starts with her investors, and includes considering diversity in terms of gender, race and age. She believes that it’s crucial to start with the earliest employees, and she actively recruits diverse candidates.
“I write a lot of cold emails, particularly around hiring and that’s partly because with job listings it’s all inbound and you can’t necessarily guarantee that that is going to be diverse. And so by writing cold emails and really following up with those people and having those conversations, I have found a way of actually making sure that I’m talking to people from different perspectives,” she said.
As she looks ahead to 2021, she’s thinking about the best approach to office versus remote and she says it will probably be mostly remote with some in-person. “I’m really balancing at this point in time, how do we really make the connections, and make them strong and genuine with a lot of trust and do that with balancing some elements of remote, knowing that is where the industry is going and if you’re going to be a company and in a post-2020 world, you probably need to adopt to some element of remote working,” she said.
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Gawq wants to burst your ‘echo chamber’ with its smarter news app
A new startup called Gawq wants to tackle the problem of fake news and the “echo chamber” problem created by social media, where our view of the world is shaped by manipulative algorithms and personalized feeds. Through Gawq’s newly launched mobile news app, it aims to present news from a range of sources, while allowing users to filter between news, opinion, paid content and more, as well as compare sources, check facts and even review the publication’s content for accuracy.
The idea for Gawq comes from Joshua Dziabiak, co-founder and now board member at the now profitable insurance tech startup The Zebra. Dziabiak stepped down from his day-to-day role this March, and founded Gawq shortly after.
“It started as a passion project and then it transformed into a business,” Dziabiak explains. “I wanted to do something that had a larger social impact. And this idea — this problem — has surfaced and been magnified in really big ways over the past year, especially,” he says.
When news is served up through social media channels, people are presented with their own version of reality, as the algorithms begin to filter out the news that doesn’t engage them and show them more of what does. Over time, this system led some publishers to pursue clicks and outrage with over-the-top, sensational headlines, but it also spawned a network of publications that would slant and bias the news in ways that better connected them with an either right or left-leaning audience.
As a result, the media environment overall began to center itself around eyeballs and not necessarily news quality, Dziabiak says. While there is still quality journalism being created, it can sometimes be hard to find among all the noise.
“I believe journalists and content creators need a new measure for success. One that is based on the core ethics of journalism, and not the number of clicks or shares,” Dziabiak notes.
Image Credits: Gawq
The Gawq name is meant to be a reminder of how today’s headlines often scream for our attention. But it misses the mark for an app about news accuracy. At its core, Gawq is a news aggregator where you are not meant to “gawk” at headlines, but actually read and consider the news with a more critical eye.
At launch, the app organizes more than 150 different top media sources of all types and sizes, including those that lean one way or the other. The publishers cover topics like U.S. and world news, politics, sports, business, tech, entertainment, science, lifestyle news and more.
Gawq also organizes the day’s news without using any sort of algorithms or personalization engines, but instead by topic. As you read, you click to compare coverage of the story with other sources to get a better idea of how different outlets are writing about the same topic. With a clever red and blue slider bar at the top of the screen, you can drag your finger over to the red side to see the coverage from right-leaning sources, or you can drag it to the blue side to see the more left-leaning coverage.
The company says it uses data from three different nonprofits that audit media — AllSides, Media Bias Fact Check and Ad Fontes Media — to determine if sources are “right” or “left.”
Image Credits: Gawq
Just below the slider bar are the related fact checks to the topic at hand, for easy reference.
While Gawq will allow users to toggle some news sources on or off within the app’s settings, it uses language that deters you from doing so by reminding you that it works best when you maintain a “diverse set of media.”
In addition, Gawq introduces a “smart labels” feature to automatically identify and tag non-news — like op-ed’s, sponsored content or even celeb gossip, if you hate that sort of thing. You can toggle these on or off, too, if you want to hide anything that’s not hard news.
Another nice feature — for the news consumer at least, if not the publisher — is that Gawq loads articles by default into a “reader mode” that strips the ads and distractions that tend to fill the pages on news websites these days. You can still click to view the article on the website, if you prefer.
While much of the above is related to how the news is presented to the reader, Gawq’s bigger bet is that it can create a Wikipedia-like community of news reviewers who will rate stories for adherence to journalistic practices. This is a more ambitious and perhaps overly optimistic endeavor.
On every article, users can click a review button that walks them through a short quiz where they’re asked to rate the story’s balance, the details provided and whether the headline was clickbait. Users then add a comment and submit their report. This review process was built off the core ethics of journalism as defined by the Society of Professional Journalists, Dziabiak says.
Image Credits: Gawq
Likely, only a minority of Gawq users would rate the stories. But over time and with scale, the reviews could help give outlets an accurate rating on news accuracy and their tendencies toward sensationalism, in the eyes of news consumers. That data may have external value, but for now, Gawq’s business model is “TBD,” Dziabiak admits.
The problem Gawq aims to tackle is a difficult one. And arguably, those who need to widen their worldview will be least likely to download a new app to do so. They’re often passive news consumers who have sat back ingesting news (and often, outrage and lies) from ever-personalized social media feeds. They then click on one favorite news TV channel for everything else. But there is a growing number of people who want a more neutral media landscape, and Gawq can help them find it with how it positions news as right, left or centered when comparing sources.
The startup is currently self-funded and has a small team of engineers, mostly working on a contract basis. Gawq has not ruled out future investment, however.
The app is a free download on iOS and Android.
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PhotoRoom launches background-removal app on Android
French startup PhotoRoom is launching its app on Android today. The company has been working on a utility photography app that lets you remove the background from a photo, swaps it for another background and tweaks your photo.
And it’s been working well on iOS already, as the company attended Y Combinator, doubled its annual recurring revenue to $2 million and raised a $1.2 million seed round.
In particular, influencers and people reselling clothes and fashion items have been relying on PhotoRoom . They use their phone as their main creativity platform. Like other professional photography apps, the startup relies on subscriptions to generate revenue ($9.49 per month or $46.99 per year).
PhotoRoom relies on machine learning to identify objects and separate them from the rest of the photo. This way, you can manipulate a specific part of your photo.
Image Credits: PhotoRoom
When the startup raised its seed round after Y Combinator, it chose to raise from Nicolas Wittenborn’s Adjacent fund, Liquid2 Ventures, as well as two groups:
- A group of business angels focused on machine learning, such as Yann LeCun (chief AI scientist at Facebook), Zehan Wang (head of Twitter Machine Learning Cortex, co-founder of Magic Poney), Nicolas Pinto (Perceptio founder), etc.
- And another group of business angels focused on mobile subscriptions, such as Holger Seim (Blinkist), Jacob Eiting (RevenueCat), John Bonten (advisor for Calm and Spotify) and Eric Setton (Tango).
With this funding round, the company plans to grow the team from three to eight persons and work on its deep learning algorithm. If you want to learn more about PhotoRoom, feel free to read my take on the product:
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Lydia raises another $86 million to build European financial super app
French fintech startup Lydia has extended its Series B round. Accel is leading the extension with all major existing shareholders also participating. Lydia first raised $45 million in January 2020 — Tencent led that investment. The startup is now raising another $86 million, which means that Lydia has raised $131 million in total as part of its Series B round.
While Lydia wouldn’t discuss the valuation of the round, its co-founder and CEO gave me a hint. “The value of the company has really significantly increased between the two parts of the B round,” he told me.
Interestingly, Amit Jhawar is heading this investment for Accel . He joined Accel as a venture partner in July and he’s going to join Lydia’s board of directors.
Jhawar joined payments company Braintree in 2011 as COO and CFO. Shortly after, Braintree acquired peer-to-peer payment app Venmo. “When we acquired Venmo it was only 15 people. They had just released their mobile app in April of 2012,” Jhawar told me in a phone interview.
PayPal later acquired Braintree and Venmo — Jhawar stuck around until early 2020 to scale Venmo to the huge fintech consumer app that 52 million people use in the U.S. Jhawar believes that peer-to-peer payments represent the beginning of a long-term consumer relationship.
“You know that P2P is successful when they leave money in their account because they’re going to come back,” he said.
Back in 2014, when I first covered Lydia, I called it the Venmo for France — they had only raised €600,000 back then. It seems like Jhawar agrees with that take. Since then, Lydia has grown quite a lot and has expanded beyond peer-to-peer payments in various ways.
With Lydia, you can send money to another user in just a few seconds. You don’t have to enter an account number in your banking app — as long as you know their phone number, they’ll receive your payment.
If you have money in your account, you can choose to spend it directly using a Visa debit card. Lydia lets you generate a virtual card that works with Apple Pay and Google Pay — you can also order a plastic card.
Lydia also supports direct deposit as you get your own IBAN in the app. You can also create money pots and send a link to other users, view your bank accounts in Lydia, donate money to hospitals and charities, get a credit line, etc.
But there’s one killer feature that stands out over the rest. Bank accounts tend to be monolithic and don’t reflect how you use money. “If you look at banks today, they call the main account a checking account. It’s outdated by design,” CEO Cyril Chiche said.
Lydia has created flexible sub-accounts that you can use in many different ways. You can create a second sub-account and set some money aside for your bills. You can create a third one and share it with a few friends because you’re going on a vacation together.
You can move money from one account to another by swiping your finger across the account grid. As you can have multiple contributors and you can change the account associated with your debit card, it means that money flows more naturally. It feels like using a messaging app, not a financial app.
And it’s been working well in France. The company now has more than 4 million users. Transactions have doubled over the past year, which means that usage is accelerating.
“Lydia has the largest P2P network in Europe outside of PayPal and has the potential to grow all across Europe with a mobile-first, customer-focused solution. This will bring demand for incremental consumer financial products and high merchant interest to accept the payment,” Jhawar told me in an email.
And 2020 has been a busy year for Lydia. The company has just released a complete redesign to better position the app as a super app for financial services. All the interactions and all the main tabs have been changed.
Lydia also re-launched its premium offering with two new premium plans that offer you higher limits over the free plan and an insurance package for the most expensive offer. Those plans are more in line with what the app offers today and should contribute to the company’s bottom line. “The next step is bringing Lydia to profitability and it’s something that has always been important for us,” Chiche said in a recent interview.
Behind the scenes, Lydia has also upgraded many core features, such as migrating cards to a new infrastructure, adding alerts to account aggregation, supporting instant SEPA transfers to bank accounts, etc.
In 2021, the company plans to build on top of that new foundation with more financial products. “We’re going to try every single product — credit, savings, investment,” Chiche said.
The company is also slowly expanding to more countries. But it wants to offer a product that feels like a local product with a local card and a local IBAN to increase acceptance rates. Lydia is starting with Portugal.
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How to pick an investor in good or bad times
In 20 years of working for startups, I’ve never seen as many plot twists and turns as I have in the last several months. Times are tough.
But, from the perspective of raising capital, 2020 has not been an awful time to be a startup founder. The world has changed, but the fundamentals of raising capital are the same. In the first half of the year, VCs invested $129 billion, and Q3 is up 9% year-over-year, reports Crunchbase.
After the screeching halt to business in April subsided, founders and investors, people who are generally comfortable with uncertainty, got back to work raising and investing.
Choosing the right VC is one of the most important decisions startup founders will make. In good times, the choice can make or break a startup. When times are bad, it’s even more likely that the wrong VC partner could be the catalyst that starts a downward spiral. With many funds still looking to make investments before the end of the year and startups jockeying for cash, founders need to know how to find the right investor.
With many funds still looking to make investments before the end of the year and startups jockeying for cash, founders need to know how to find the right investor.
It’s not about simply choosing an investor — you are hiring your next boss. The investor should be someone you feel comfortable working with and working for.
You don’t want an investor who is checked out, but too much focus isn’t good, either. And, you don’t want an investor who is completely agreeable since your best outcome will be driven by a constructively demanding advisor.
My company, Quiq, had several term sheets when the dust settled on our Series B pitch meetings. Since the financial terms were similar, selecting an investor was made on a more subjective basis and boiled down to two fundamental questions:
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Dear Sophie: How did immigration change for startup founders in 2020?
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Dear Sophie:
I’m on an F1 OPT and am about to incorporate a startup with my two American co-founders. What were the biggest immigration changes in 2020 affecting us?
—Ambitious in Albany
Dear Ambitious:
Congrats on creating your startup. The Electoral College has voted and Biden is scheduled to take office on January 20, 2021. It may take him a few months to undo many of the Trump immigration changes, so there are several things for you to consider.
2020 gave many of us whiplash with all the things that happened! We braced for the worst in April after President Trump tweeted that he would suspend immigration to the U.S. In the end, the executive proclamations he issued in April and June fell far short of that and immigration remains possible.
However, these bans remain in effect until at least the end of 2020. The proclamations placed moratoriums on the issuance of green cards by the U.S. Embassies and consulates abroad, as well as H-1B, H-2B, J-1 and L-1 work visas. The Department of State has expanded the list of exceptions to these bans so many people now qualify.
One of the current constraints affecting the most people is that many embassies and consulates remain closed or are operating at significantly reduced capacity. Given that, we are recommending to our clients who are already in the U.S. to avoid leaving by seeking Extensions of Status, Changes of Status and Adjustments of Status with USCIS stateside.
The H-1B may be another promising visa option for your future as a founder. There are two ways to do it: “cap-subject” (the annual spring lottery) and “cap-exempt” (anytime of year). At a minimum, it’s easy for your startup to register you for the upcoming H-1B lottery in March 2021. It only costs $10 to register an H-1B candidate. If you’re selected, your startup could file an H-1B petition on your behalf. If you are not selected, your startup can register you again in 2022.
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The team behind Jumpcut and SnappyTV is building a new collaborative video tool
Mike Folgner has had his share of success building video editing tools, having sold Jumpcut.com to Yahoo and SnappyTV to Twitter. But as he explained in a new Medium post, he still sees “unfinished business” in the video industry.
“Today, most major productivity software categories have made the leap from desktop software to the web,” Folgner wrote. “Despite significant progress in web technology, professional video tools have not made this leap. With WebGL, WASM, and other advancements this will change. We can now build performant, feature rich applications integrated with the fabric of the web.”
To create full-featured video editing software that works in the browser, Folgner has teamed up with Ryan Cunningham (his Jumpcut and SnappyTV co-founder) and Ashot Petrosian (who was a lead engineer at Jumpcut) to found a new startup called Tensil, which is currently taking signups for anyone who wants to test the alpha version of its first product Scenery. (And they’ve hired Chris Martin as their first key engineer.)
Tensil has raised $3.89 million in funding led by Freestyle VC, with participation from Precursor Ventures, Wireframe Ventures, Transmedia Capital, Uphonest Capital, Rembrandt Venture Partners, Kayvon Beykpour, Kevin Weil, Elizabeth Weil, Russ Fradin, Ross Walker, Joe Bernstein, Keith Coleman, David Pidwell, Ryan Peirce and Don Ryan.
Image Credits: Tensil
Since they’re still developing and testing the product, I didn’t get a chance to try Scenery for myself, but I got on a call with Folgner and Petrosian to discuss their plans.
“If you stop and think about what should a video editor be today, you won’t build the same tool that was built in the 1970s,” Petrosian told me.
For example, he said that rather than relying on the standard timeline view of existing video editors, Scenery will present a two-dimensional canvas, allowing editors to think “more like a graphic designer.”
More broadly, Petrosian said Scenery is meant to better reflect current video production and editing needs, helping teams produce videos more quickly and collaboratively. In fact, he suggested that describing Scenery as merely an editor is selling it short — it’s closer to “a video production system.”
Folgner added that by moving the process into the browser, Scenery can help non-editors get involved in the process, similar to the way that Figma brought new team members into the design process.
“We are really excited about rethinking video editing as a team sport,” he said.
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PrivacyGrader is a free tool to help companies get smarter about data and disclosures
As businesses face a complex and evolving privacy landscape, a new tool called PrivacyGrader can help them make sure they’re doing the right things.
The tool was created by Tom Chavez and Vivek Vaidya, as part of their new data compliance and security startup Ketch. (Chavez and Vaidya also founded the super{set} startup studio; Ketch is part of the super{set} portfolio.)
“The truth of the matter is that we’ve cared a lot about these issues for a long time,” Chavez said. “What’s different today, in 2020, versus say a decade ago … is that it’s become an existential imperative for businesses.”
In order to use PrivacyGrader, you need to have an authenticated email address tied to the website that you want analyzed — so you shouldn’t be able to see your competitors’ grades.
Once your request and email address are validated, Vaidya said you should get an analysis back in less than 24 hours, which will score your site across more than 50 different factors, including trackers, storage of personal data and overall compliance with GDPR, CCPA and other regulations.
For example, Chavez and Vaidya provided me with an analysis of TechCrunch, where we scored 56% overall (Chavez assured me that this “absolutely on par with what we’re seeing out there”). The report outlined the privacy experience for users in different countries and pointed to areas where we can do better.
Chavez emphasized that this isn’t meant to be the end of a company’s privacy discussion, but rather a high-level view that helps the product and legal teams know where to focus their attention.
“Think of the scores … as an X-ray, not an MRI,” he said. “They’re indicative, not conclusive, but they shed light across the key dimensions.”
Presumably, Chavez and Vaidya are hoping companies that use PrivacyGrader will turn to Ketch’s paid products for help, but Vaidya said they’ll continue improving the free service and treat it as a “first-class citizen product.”
Companies that have already used PrivacyGrader include Patreon, The Home Depot and Chubbies. For example, Patreon’s deputy legal counsel Priya Sanger said that the service “helped us identify improved data governance in order to effectively execute our marketing and sales strategy.”
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Hightouch raises $2.1M to help businesses get more value from their data warehouses
Hightouch, a SaaS service that helps businesses sync their customer data across sales and marketing tools, is coming out of stealth and announcing a $2.1 million seed round. The round was led by Afore Capital and Slack Fund, with a number of angel investors also participating.
At its core, Hightouch, which participated in Y Combinator’s Summer 2019 batch, aims to solve the customer data integration problems that many businesses today face.
During their time at Segment, Hightouch co-founders Tejas Manohar and Josh Curl witnessed the rise of data warehouses like Snowflake, Google’s BigQuery and Amazon Redshift — that’s where a lot of Segment data ends up, after all. As businesses adopt data warehouses, they now have a central repository for all of their customer data. Typically, though, this information is then only used for analytics purposes. Together with former Bessemer Ventures investor Kashish Gupta, the team decided to see how they could innovate on top of this trend and help businesses activate all of this information.
HighTouch co-founders Kashish Gupta, Josh Curl and Tejas Manohar.
“What we found is that, with all the customer data inside of the data warehouse, it doesn’t make sense for it to just be used for analytics purposes — it also makes sense for these operational purposes like serving different business teams with the data they need to run things like marketing campaigns — or in product personalization,” Manohar told me. “That’s the angle that we’ve taken with Hightouch. It stems from us seeing the explosive growth of the data warehouse space, both in terms of technology advancements as well as like accessibility and adoption. […] Our goal is to be seen as the company that makes the warehouse not just for analytics but for these operational use cases.”
It helps that all of the big data warehousing platforms have standardized on SQL as their query language — and because the warehousing services have already solved the problem of ingesting all of this data, Hightouch doesn’t have to worry about this part of the tech stack either. And as Curl added, Snowflake and its competitors never quite went beyond serving the analytics use case either.
Image Credits: Hightouch
As for the product itself, Hightouch lets users create SQL queries and then send that data to different destinations — maybe a CRM system like Salesforce or a marketing platform like Marketo — after transforming it to the format that the destination platform expects.
Expert users can write their own SQL queries for this, but the team also built a graphical interface to help non-developers create their own queries. The core audience, though, is data teams — and they, too, will likely see value in the graphical user interface because it will speed up their workflows as well. “We want to empower the business user to access whatever models and aggregation the data user has done in the warehouse,” Gupta explained.
The company is agnostic to how and where its users want to operationalize their data, but the most common use cases right now focus on B2C companies, where marketing teams often use the data, as well as sales teams at B2B companies.
Image Credits: Hightouch
“It feels like there’s an emerging category here of tooling that’s being built on top of a data warehouse natively, rather than being a standard SaaS tool where it is its own data store and then you manage a secondary data store,” Curl said. “We have a class of things here that connect to a data warehouse and make use of that data for operational purposes. There’s no industry term for that yet, but we really believe that that’s the future of where data engineering is going. It’s about building off this centralized platform like Snowflake, BigQuery and things like that.”
“Warehouse-native,” Manohar suggested as a potential name here. We’ll see if it sticks.
Hightouch originally raised its round after its participation in the Y Combinator demo day but decided not to disclose it until it felt like it had found the right product/market fit. Current customers include the likes of Retool, Proof, Stream and Abacus, in addition to a number of significantly larger companies the team isn’t able to name publicly.
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