mParticle's Series E: The rise of Customer Data Infrastructure
mParticle CEO Michael Katz discusses the company's latest funding round, sharing the company's growth thus far and future trajectory.
First off, while I have thanked the team a number of times I also want to do so publicly. This is a testament to the hard work and commitment from everyone here over the past couple years battling through some growing pains, making hard tradeoffs, and being under-resourced throughout. The team we have is truly special, and they continue to inspire me to become a better CEO day in and day out.
So in today’s world where unicorns are clearly no longer an endangered species, and raising excessive capital is the new norm, the magnitude of what we have accomplished will never be captured in the headline alone.
But with every round that we have raised, we continue to make our vision a reality, investing more in meeting the needs of our customers, and creating the best possible employee experience for everyone here at mParticle. We have work to do but this continues to be such a great journey.
While I’m expected to say this, what we’re building at mParticle is truly special. I do think we will surprise people by where we take the vision, as that seems to be a common theme since inception. To be honest, we are so early in our journey, and couldn't be more excited for the next few years as we partner with the Permira Growth team, and our existing investors, to continue to build towards our vision one day at a time. To think about the opportunity we have in front of us, it's important to look back and see the progress we have made so far.
Series A in 2015: Making Mobile Data More Mobile
When we launched the company in 2013, our vision was to solve the customer data challenges that reflected the shift to a new reality for many brands. With mobile becoming the primary screen, we felt that the platform shift would create massive opportunity. Several legacy data management solutions which centered around the online advertising ecosystem were stuck based on architectural decisions that wed them to legacy web technologies such as pixels and third party cookies, and we felt that there was a great opportunity if we could move fast.
When we launched publicly in 2015, we believed that mobile would inevitably become the centerpiece of the digital experience, making mobile data the center of mass within most organizations over time. We reasoned that if we could solve the mobile data challenges, we would be well positioned to solve the future data challenges that teams would face as they navigated the platform shift from web to mobile, and beyond. Our view was that to empower the marketer, we needed to help teams modernize their data platform and in doing so, help them to be more agile by reducing the dependency on engineering. What this meant more specifically was reducing SDK fatigue / bloat, and streamlining data collection to a single API call, while providing an abstraction layer for downstream integration.
Our belief was that mobile was the future, and it would also provide a great opportunity to unify all digital data.
Series B in 2016: Welcome The 3rd Wave of Data Platforms
Three years in and our early bet on solving data challenges beyond the browser began to pay off. Moving teams from fragile data solutions and bloated client-side configurations to more durable solutions that were API based, built with privacy and security as first order customer needs, helped create significant market traction. Built primarily for data consumers (marketers and analysts), we saw early adoption among consumer brands with large digital footprints.
Our goal of reducing engineering dependencies created a win-win for marketers and engineers alike that allowed marketers to move faster, while empowering engineers to remove a high maintenance burden they had unknowingly created by embedding lots of SDKs and trackers directly into their code. Working with companies like Ticketmaster, Airbnb, and Spotify to name a few we could see the future begin to take shape as we helped teams tackle the opportunity around data unification. Meanwhile, legacy web solutions Data Management Platforms (DMPs) and tag managers were still enjoying a successful run in web environments.
By late-2016, we felt that the third generation of marketing data platforms was beginning to emerge. The first generation focused on flat file storage of marketing and loyalty data primarily used to improve direct response marketing strategies. The second generation of data platforms were designed to address data scalability and business model challenges in the digital media and advertising technology ecosystem. The third generation of platforms would center on democratizing customer data from source or system to any endpoint or vendor used across the business.
New technologies were accessible that were required to capitalize on the multi-channel opportunity that weren’t previously available to legacy solutions. This gave us a structural advantage over legacy solutions that they couldn’t easily incorporate such as streaming data infrastructure to accelerate the possibilities around real-time data movement, and we saw the rapid growth of the API economy which meant that integration could be simplified and streamlined across a vast ecosystem of partners.
Series C in 2017: The investment in Identity
We had begun to establish ourselves as one of the market leaders in the CDP space. Our primary competitor, Segment, became a great adversary and pushed us to innovate with incredible speed and efficiency as they began to capture significant long tail market share. This helped reinforce our decision to stay within the Enterprise and focus on serving the worlds’ biggest and best software-centric brands. We became the de facto choice within the enterprise based on our understanding of our customers needs, and our commitment to privacy and security.
Meeting the needs of the Enterprise also meant prioritizing flexibility over simplicity, at the time. Nowhere was this more important than in our Identity resolution engine, IDSync. Originally built to help teams merge and manage customer profile and event data, it quickly became clear that the business rules, industry regulations, and overall considerations varied greatly across each customer and a one size fits all approach to identify wasn't sufficient.
Building out IDSync 2.0 became the foundation for subsequent data quality, governance, and segmentation investments. And with GDPR looming, we began to author an open source privacy framework that has been adopted by thousands of companies called OpenDSR (formerly OpenGDPR).
By now, the term CDP was becoming much more commonplace; and several companies emerged with various CDP offerings ranging from tools that focused on marketing, to content management, to analytics.
Series D in 2020: Data As a Team Sport
But late 2018 into early 2019, we saw a market shift happening. The CDP space had become fairly mainstream and much better understood, appropriately trending toward peak hype cycle. Soon there was no shortage of vendors identifying themselves as CDPs or at least claiming to have CDP-capabilities. During this time, we began to see a shift in the market however, as the problems we were helping our customers solve began to be widely recognized as universal in nature, extending well beyond (but also inclusive of) the needs of marketing.
Mid-way through 2019, we realized that we needed to re-orient our view of the CDP opportunity which empowered marketers to reduce engineering dependencies, to one that could meet the underlying needs of the entire business. The concept of Data as a Team Sport was born, and it required us to shift our mindset to be more inclusive of the needs of the business in their entirety. Our belief was that the CDP market was beginning to bifurcate into application-centric CDPs and customer data infrastructure. To capitalize on this opportunity, we began to invest in data quality tooling, and continued to build out our data governance capabilities to better address data sovereignty and regulatory requirements.
Series E in 2021: The rise of Customer Data Infrastructure
COVID. Accelerated digitization. The need for personalization. We all know the story by now. There has been a massive shift to digital and there’s no going back.
Throughout this shift, we came to appreciate the truly universal nature of teams having to do more with less, focus on building a strong foundation for durable success via first party data, and have integrated privacy controls. The death of the third party cookie, and iOS 14.5 changes further cemented this need as not only important but also urgent.
Throughout COVID, we were able to accelerate new sales 50% in 2020 due to our commitment to systematizing the business, and doubling down on solving the core customer data challenges that are necessary for sustained digital execution. Midway through 2021 and we have experienced new sales growth accelerate to 100% year over year and are now properly capitalized to make a big splash.
So now what? With accelerated digitization, we are seeing a greater need than ever to solve challenges around data quality, governance, and connectivity. After hiring Chee Chew from Twilio as our Chief Product Officer back in May, we will continue to invest in innovation and accelerate our product vision. We have doubled the size of our engineering team in recent quarters and we will be expanding distribution with entry into new markets, verticals, and segments in the coming months as well. We expect to continue to build out our executive team but in the meantime, can’t thank all of the mPeeps enough for everything they continue to give to each other, our customers, and to the company. It's incredibly inspiring.