Venture funding in the overall health tech market fell 27% from 2022Read more...
The company has doubled its user base in the past year and tripled its revenue in eight months
Business have more data than they've ever had before, which should be giving them competitive advantage. They can use it for things like informing product decisions, guiding go-to-market strategy, building personalized campaigns, and providing the best possible customer service. The problem is, though, that getting all that data into systems where the whole team can use it is incredibly difficult.
That is where customer data hub Segment comes in. It is a company that wants to make accessing data as easy as possible across companies.
On Friday Segment announced that it has raised $27 million in a Series B round led by Thrive Capital with participation from existing investors Accel Partners, Kleiner Perkins Caufield & Byers, and Jon Winkelried, former president of Goldman Sachs.
The company has previously raised $17.6 million, including a $15 million round almost one year ago exactly This round brings its total funding to $44.6 million.
Founded in 2011, the San Francisco-based Segment provides a single system for tracking customer data and sending it out to third-party tools and databases in order to collect all data in one place, and then send it to tools for analytics, marketing automation, and raw data access with SQL.
"We actually have a lot of different folks who use Segment depending on the size of the company but typically our customers are technical — an engineer, a technical co-founder, a VP of Engineering or a CTO," Peter Reinhardt, CEO & Co-founder of Segment, told me in an interview.
"They use Segment as a centralized system to track data about how customers use their sites and mobile apps and send that data onto third-party tools and databases like Marketo, Google Analytics, Optimizely, and Amazon Redshift. Once they integrate the Segment API, their teammates in marketing, product, BI, and success can start sending their data to the tools they need with the flip of a switch."
Serving customers like Conde Nast, Bonobos and HotelTonight, Segment now processes 50 billion API calls per month. The company has doubled its user base in the past year, tripled its revenue in the past eight months, and now offers 160 integrations across 20 categories.
What the platform really does is save engineers time while also improving the quality of their data.
"Right now, engineers waste time integrating tools one by one and marketers and product people end up sticking with the tools they have instead of the tools they want. Deciding what data to send to a new tool, learning their API, integrating the tool, debugging, and ensuring data quality can take anywhere from a few days to a few months depending on the complexity of the tool," Reinhardt said.
"Plus, our customers use between five and 11 tools on average! Segment not only save engineers time on integrations, but we help them improve the quality of their data by sending the same copy to every tool they want to use. And, we give their entire company access to the tools they need without being blocked by technical teammates. It’s a win-win."
Segment plans to use the new funding to double the team from 50 to 100, starting with building out the engineering, product and design teams, then continuing to nearly every department.
The company will also begin to develop new offerings for customers to query and build on its raw data, connecting to data warehousing services beyond Amazon Redshift such as Postgres, MySQL and more.
"We don’t want to let too much out of the bag. But, the first thing we’re going to focus on is helping customers send their data to more databases and infrastructure systems to build internal analytics, store and query their raw data. We’ll also be expanding the types of data you can collect through Segment," said Reinhardt.
Finally, Segment plans to collect new types of data, capturing experiences where customers interact with brands outside of theiradd connections to popular data storage platforms, and capture new types of customer data.
"Website and in-product event data is super helpful for understanding things like user flows and marketing attribution. However, customers interact with companies in a bunch of places outside of their websites, mobile apps and servers, for example email opens. These customer interactions affect engagement, retention and conversion, but it’s hard to tell how right now. Stay tuned for more news on this front!"
In addition to the funding, as part of the investment, Will Gaybrick, CFO of Stripe and General Partner at Thrive Capital, will be joining the board of directors at Segment.
"Will is an incredibly sharp strategic thinker with the strength and willingness to help the company make hard decisions. He’s a relentless source of energy and ideas, and works with great companies in our space: Github for developers, Stripe for APIs, and Instacart for marketplaces," Reinhardt told me.
What Segment is doing right now is something relatively new, he said, to the point where nobody else is even doing it yet.
"We’re at the forefront of a new industry, so there aren't too many companies that do what we do at this point. A few folks are trying to do a piece of it, including tag managers, etc, but no one offers a single API to get your data from multiple platforms into multiple integrations and databases based on a strong data model."
Support VatorNews by Donating
Read more from our "Trends and news" series
Veda will use its automation technology to analyze, verify, and standardize Humana’s dataRead more...
GE HealthCare will use Biofourmis’ AI-guided algorithms to deliver personalized, at-home careRead more...