Martech company Iterable just raised $60 million in what it calls its last funding round, and plans to use it to take on Salesforce and Oracle and get profitable
- A growing number of marketing tech companies are trying to help brands make sure the messages they send to customers are relevant.
- Iterable is a 6-year-old, San Francisco-based firm that raised $60 million in series D funding led by Viking Global Investors, bringing its total funding to more than $140 million.
- It wants to take on big marketing cloud companies like Salesforce, Oracle, and Adobe with its platform that lets marketers create, run, and tweak communications with customers through email, texts, and the like.
- Iterable counts Priceline, Evernote, Zillow, and SeatGeek as customers.
- It plans to use the new funding to grow its headcount to 400 from 300, build its AI and data-privacy capabilities, and get profitable.
- But martech has become hotly competitive, and it'll be hard to win big clients that are tied up in years-long contracts with the big marketing clouds.
- Click here for more BI Prime stories.
The battle to manage marketers' customer relationships is heating up.
Iterable, a 6-year-old San Francisco-based firm, is announcing today that it has raised $60 million in series D funding led by Viking Global Investors, along with Index Venture, CRV, Blue Cloud Ventures, Harmony Partners, and Stereo Capital, bringing its total funding to more than $140 million.
Iterable has a platform that lets brands send messages to people by email, text, and in-app and on-site messaging. It sells software as a service (SaaS) to companies based on the number of contacts they have and volume of messages sent. Its typical enterprise contract starts at $200,000 and goes up to $1 million or so. Priceline, Evernote, Zillow, and SeatGeek are clients.
Justin Zhu, cofounder and CEO of Iterable, said this funding round would be the company's last as it focuses on getting profitable. He said the company would use the funding to bolster its platform and build its list of marketing tech partners. He said he expected headcount to grow to 400 by the end of 2020, from 300 now.
"Our focus is to bring Iterable's CRM to the mainstream, to be a fourth option outside Oracle, Salesforce, Adobe," he said.
People are being bombarded with more marketing messages than ever, and there are all kinds of companies helping marketers make sure they don't get ignored. A November Forrester report titled "The Forrester Wave: Cross-Channel Campaign Management (Independent Platforms)" listed Iterable as one of nine independent vendors including Sailthru and Cheetah Digital that are trying to win marketers' business in this area.
But Zhu is also going up against the big marketing cloud companies like Salesforce, Oracle, and Adobe, which are also building up their CRM businesses. Salesforce took a big step in that direction when it acquired Tableau for $15.7 billion earlier this year.
The Forrester report characterized Iterable as a "strong performer" among independent vendors, with strength in areas like strategy and market presence. Customers said Iterable had a "super fast email solution with an intuitive interface," Forrester wrote in the report.
But it also ranked Iterable low in areas like user experience, delivery model, and said Iterable lagged in the area of mobile engagement automation.
Guy Horrocks, who founded Carnival Labs, a mobile marketing automation platform that was sold to Sailthru, is well versed in Iterable and its competitors. He said Iterable's advantages are that it works across channels, is easy to use, is winning some tech savvy customers that have scale, and has an opportunity to get a jump on personalization, which marketers are still new to.
On the other hand, it'll be hard for Iterable to crack big legacy marketers because they're tied up in multi-year deals with big marketing cloud companies that have more features and are willing to keep prices low to keep them, he said. There has been tons of money flowing into marketing tech, and as a result, there are a lot of other competitors, some of which have better email products, in his view.
"It's an intensely competitive space," Horrocks said.
Iterable says it plans to compete on personalization
Zhu's argument is that Iterable has a leg up over companies like Salesforce that built their CRM platforms by buying other companies. Companies like Iterable also position themselves as giving marketers flexibility to use multiple vendors to manage and use the data they gather on customers versus the big marketing clouds with their one-stop-shop approach.
In terms of Iterable's platform, he's pitching its ability to help companies comply with privacy laws and personalize their messages. Iterable assigns scores to consumers based on how engaged they are with the company, and suggests different messages depending on their engagement level.
"Consumers are sick of being targeted, so it'll be difficult to track people unless they explicitly opt in," he said. "And it's going to be an era of first-party data. We help customers use all the data they have permission to use."