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The pandemic-induced digitization of everything is a trend that’s been well documented on almost every media site. Businesses had to shut their doors and find a different way of interacting with customers, and that came via digital initiatives. Prior to the pandemic, digital transformation was something most companies were considering. Post-pandemic, it’s something most companies rely on to transact business, provide service, and everything else in the customer lifecycle.
One of the challenges of making the hard pivot to digital is the risk of dehumanizing the experience for the customer. Websites often treat all customers the same or use basic demographics to customize content, but the reality is people are all different and have unique needs and wants. The better a company can create a bespoke experience, the higher the brand loyalty. Bespoke is an ongoing, personalized experience that will wow you — but do it to you quietly — every time you step out the door.
Digital experience analytics provider Contentsquare has been focused on making the digital world more human. In the past year, the company has rolled out a number of key new features, including AI capabilities and a cookieless solution, acquired two companies, opened a number of new offices globally, and hired 700 people. The company now has 1,500 employees.
Recently, Contentsquare announced its next growth investment round, which consists of a $400 million series F venture-backed round and a $200 million line of debt financing, led by Sixth Street, a PE firm that’s completed investments in companies including Airbnb, Spotify, SnapLogic, Wind Power and sports teams Real Madrid and the San Antonio Spurs. This brings the company’s total funding to $1.4 billion over the six rounds, inclusive of the debt.
Pandemic hasn’t hurt Contentsquare
One of the notable aspects of the round is Contentsquare’s valuation of $5.6 billion, which is double from a year ago — a testament to the growth of the company and the important market need and opportunity. Our surprise has less to do with Contentsquare and more to do with the overall macro and valuation of publicly traded companies. The financial markets have seen many of the high-flying pandemic-related companies see their market caps cut by as much as 90% while Contentsquare has doubled.
This highlights several key points. The first is the intense focus businesses have on improving digital interactions is not a pandemic bubble, but rather something that will create long-term market leadership for companies that do it right. While investors have bailed on many “work-from-home”-types of companies, they seem to be increasing investments in companies that have a direct impact on customer experience. This also validates Contentsquare’s leadership in this space.
Digital experience analytics is a relatively new market and there is no de facto leader, such as Salesforce in CRM. Contentsquare has used its previous funding rounds to quickly add new capabilities both organically and inorganically to create an experience platform that not only collects and analyzes data, but also provides actionable insights.
“It’s not enough in today’s digital environment to judge success purely on traditional KPIs, like clicks or conversions,” said Contentsquare CMO Niki Hall. “Today, understanding intent, frustrations, delight – all of that matters and creates value to brand and customers alike. Surfacing insight that represents the end-to-end customer experience empowers brands to make meaningful decisions and take intentional action, improve in real time and, if using Contentsquare, do it all while maintaining the highest levels of privacy and trust.”
Aiming to become a ‘one-stop shop’
We are still in the early innings of this technology, and we imagine Contentsquare will use much of the investment round to rapidly grow its customer base and continue making significant headway on the $34 billion total addressable market. It currently has more than 1,000 enterprise customers, but that’s still a small piece of the overall pie. Right now, winning deals is more of a land grab, and that requires investments in marketing, sales and more local presence globally.
We also expect the company to continue to grow its platform capabilities to be a true “one-stop shop.” The company has a five-product strategy for its platform that includes analytics for analyzing customer journey and content, optimizing mobile apps, finding and fixing surface errors and load times, understanding product merchandising and pricing analytics, and recommendations for benchmarking and scoring. All of these products can help businesses create an experience that is unique to each person.
Digital is certainly the preferred way forward for most customers, but brands have to be careful to not over-digitize experiences where consumers believe their needs are not being met. Contentsquare has done an excellent job of meeting the needs of its customers. Evidence of this is its growth and funding. With this round, we expect to see the company step on the gas and accelerate what’s possible with digital experiences.
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