TellApart raises $13M Series B round

The company gets support from Bain Capital for its high-value customer identification platform

TellApart, an advertising platform that takes a unique pay-for-performance model, announced Monday that it has raised $13 million in Series B funding led by Bain Capital, bringing the company’s total raised to $17.75 million.

Founded by former Google product and engineering executives Josh McFarland and Mark Ayzenshtat, the company’s platform takes a unique angle on retargeting by focusing on the best customer prospects. TellApart’s Customer Data Platform assigns a Customer Quality Score (CQScore) to each individual customer, which is based on the customer’s onsite behavior patterns, such as which products they’ve browsed on a retailer’s site, items they’ve purchased, and even in-store purchases (for multi-channel retailers).

All of this data is compiled into a CQScore that allows retailers to distinguish the high-value customer from the rest (hence the company’s name: tell-apart) and direct personalized ads and marketing messages to those customers. This translates to more efficient market and advertising, which translates to higher conversion rates. TellApart averages a 7.5% click-through rate, which is 10x higher than the industry average, and boasts a conversion rate of 4.5%, which is 2.5x higher than the industry average. For online retailers, this equates to a 3%-5% increase in overall revenue.

The company also has a pretty interesting business model: it doesn’t make money unless you do. In other words, TellApart only gets its share when a prospect clicks on a TellApart-generated ad and makes a purchase, making the service completely risk-free for retailers. And it shows how confident TellApart is in its solution.

"We believe that the next big opportunity in e-commerce is around deep customer analytics," said Ajay Agarwal, managing director at Bain Capital Ventures, in a statement. "TellApart's combination of a world class founding team, rich technology platform and strong momentum positions them well to be the leader in this space.” Agarwal will be joining TellApart’s board of directors.

Founded in 2009, TellApart has raised funds from Greylock Partners and several prominent angel investors, including Ron Conway, Twitter CEO Dick Costolo, LinkedIn executive chairman Reid Hoffman, and former CEO of OpenTable Jeff Jordan.

"Companies such as Amazon and Netflix became dominant players in their markets by mastering the art of analyzing and acting on customer data," said James Slavet, a partner at Greylock and a TellApart board member, in a statement. "TellApart has built the expertise, infrastructure and access to data necessary to allow all e-commerce companies to maximize the value of their customer information."

The company works with some of the top online retailers, including CafePress, Diapers.com, Drugstore.com, eBags and Hayneedle.