While the pandemic prompted companies to digitize much of the way they do business, not every brand made the pivot successfully. In some cases, it cost them dearly. According to Couchbase, enterprises wasted on average $4.12 million on failed, delayed or scaled-back projects in 2020. The same survey found that over four-fifths of companies — 82% — were prevented from pursuing digital transformation projects due to the staffing, resources and expertise required.
The consequences of delayed or wasted projects often extend beyond cash — think delaying strategic goals. That’s one of the reasons Jonathan Cherki founded Contentsquare, a platform that allows businesses to track online customer behavior to inform digital strategies.
“While studying at the ESSEC business school in France, I became fascinated with the gap between the digital experiences brands thought they were offering, 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 companies work by creating a data-driven culture that is accessible to everyone. Ultimately, I want to help create a world where every digital interaction improves our lives.”
Cherki started to develop the technology that would become Contentsquare as a college student. Since 2012, he’s served as CEO, moving the company’s headquarters from Marseille to New York in 2017.
Now, with 17 offices around the world and more than 1,000 enterprise customers, including BMW, Giorgio Armani, Samsung, Sephora and Virgin Atlantic, Contentsquare has grown into a behemoth. Its financing reflects this — the company today announced that it closed a $600 million Series F round at a $5.6 billion valuation, exactly double Contentsquare’s valuation as of last May ($2.8 billion). The tranche is split between $400 million in equity and $200 million in debt. But it’s still a remarkable amount given the current economic climate and considering that Contentsquare raised $500 million just a year ago.
Warranting the infusion, which was led by Sixth Street Growth, was further expansion, according to Cherki. He says the new cash will be put toward R&D efforts, geographic and market growth, and launching as many as three new products within the next 12 to 18 months. Hiring will be another focus as Contentsquare’s headcount climbs above 1,500 people.
Contentsquare remains focused on its original bread and butter, which is to say 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 in apps and translates them to recommendations aimed at helping steer a company’s content decisions. Using algorithms, the platform attempts to automatically discover areas for improving revenue and experience, delivering metrics and “session replays” that reconstruct the steps individual visitors took on Contentsquare-tracked websites.
Contentsquare also provides an API that customers can use to integrate the platform with web apps and other systems, like personalization engines.
“Our solution analyzes 3,200 billion customer interactions monthly on sites that process $2.5 billion in transactions daily. Over one million websites worldwide across all verticals use Contentsquare today,” Cherki said. “The pandemic accelerated a massive shift to digital, which highlighted the gaps in online experience and confirmed customer experience as a key differentiator. The current macroeconomic climate has only further highlighted the criticality of having a standout customer experience for businesses of any size, across any vertical.”
While business is booming — Cherki says that annual recurring revenue is in the range of “several hundred million dollars” — Contentsquare faces headwinds, including mounting regulatory pressure. In the U.S. and abroad, policymakers are eyeing restrictions on the amount of data advertisers can collect for targeting purposes, making certain analytics products less attractive. Both anticipating this and responding to the growing consumer appetite for enhanced privacy protections, vendors such as Apple have released privacy-forward features like App Tracking Transparency that threaten to disrupt the behind-the-scenes mechanics of many trackers.
Cherki says that Contentsquare has been preparing for this future, last year launching what he claims is one of the industry’s first “cookie-less” customer experience analytics products. (In the web context, “cookies” are text files that websites use to monitor visitors and remember specific information about them, like login data.) Since the Series E, Contentsquare has also acquired AI startup Upstride and product experience insights platform Hotjar to further its machine learning and small- and medium-sized business market ambitions.
Elsewhere in the organization, Contentsquare operates a nonprofit foundation to help promote digital accessibility in areas like education and corporate social responsibility. In a related but transparently 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 moves are enough to fend off the increased competition in the digital customer analytics space. Quantum Metric, a platform that helps companies improve their websites and apps by gleaning feedback from users, raised $200 million last January at an over-$1 billion valuation. In August 2021, Atlanta, Georgia–based FullStory landed $103 million at a $1.8 billion valuation for its code analytics suite for digital customer experiences. While smaller, Airkit and Glassbox have nabbed tens of millions to develop products that optimize unique customer journeys on web and mobile apps.
Some surveys suggest there’s no shortage of new potential customers, however. Ninety-six percent of executives responding to a 2022 poll from Precisely said that they have invested or plan to invest in data integration, data integrity and data enrichment technologies for customer experience in the coming months.
“Resources and budget are leaner than before and that poses challenges for businesses. At the same time, customer experience remains the key differentiator, so we’re focused as a company on helping our customers succeed by empowering them with the customer insights that will help them create outstanding experiences every time, and thrive,” Cherki said. “As we extend in more and more markets, we have many competitors, but the strength of Contentsquare is to offer a one stop shop experience analytics platform. Our mission is to make the digital world more human, by empowering businesses to access a deeper understanding of their customers, to take intelligent action at scale, and to build experiences with trust at the core.”
Among others, Contentsquare’s previous investors include SoftBank Vision Fund 2, BlackRock, Canaan Partners, Highland Europe and Eurazeo. The company’s war chest totals $1.4 billion.
source: https://techcrunch.com/2022/07/20/contentsquare-closes-a-mammoth-600m-round-as-customers-clamor-for-digital-analytics/