The company was acquired by enterprise software investment firm Cuadrilla Capital last monthRead more...
The company recently raised an $18 million Series A round of funding
There's no denying the power and popularity of messaging apps; of the most popular iOS apps in 2018, three of them are in that category: Snapchat, Facebook Messenger and WhatsApp. And chatbots are already becoming a big part of those platforms, to help businesses automate their customer service.
Yet, when it comes to small business owners, they don't have the know-how or expertise to take full advantage of these apps and bots, leaving them to rely on old technologies that don't give them the best opportunity to reach new customers.
ManyChat wants to close that gap by allowing small businesses to more easily create a Facebook Messenger bot for marketing, sales and support. It offers a visual drag and drop builder, meaning there's no programming or code necessary.
On Monday, the company announced it raised $18 million in Series A funding led by Bessemer Venture Partners, with participation from previous investor Flint Capital. Thibrings ManyChat's total funding to approximately $22 million in total; the company previously received seed capital from startup accelerator 500 Startups.
ManyChat tripled its customer acquisition between 2017 and 2018 and now has over 1 million accounts created on the platform. Collectively, ManyChat’s customers have more than 350 million subscribers and over 7 billion messages are exchanged over ManyChat’s platform every month.
The company says the new funding will be used to hire across various operational roles, including research and development, marketing, and customer success. That means it will be doubling its 70 to 80 person team in the next year or so.
In addition to the funding, it was also announced that Ethan Kurzweil, partner at Bessemer, will join the company’s board of directors, and that Bessemer partner Alex Ferrara will also be joining as a board observer.
Mikael Yang, ManyChat's co-founder and CEO, spoke to VatorNews about his plan to help small businesses take advantage of messenger apps and how chatbots are changing the way business is done online.
VatorNews: What is the problem that you have identified and how are you solving it with ManyChat?
Mikael Yang: Over 2 billion people use messaging products, many as their primary communication channel. Yet businesses are still stuck in the past, using email and the phone to talk to their customers. Email open and click through rates continue to yield less and less every year. Websites and Landing pages are passive in nature. And social media is 1 to many and impersonal.
ManyChat helps businesses connect with customers over popular messaging apps like Facebook Messenger, and in the future additional popular messaging platforms. We believe messaging provides a richer, real-time, and personalized experience that passive channels like email and landing pages simply cannot. This creates greater customer engagement which in turn drives more sales and loyalty.
VN: Who is the typical customer for ManyChat? Walk me through some typical use cases.
MY: We cater to small businesses. These are e-commerce stores, online service businesses like online coaches and educators, and offline local businesses like salons, gyms, spas, restaurants, real-estate agents, and financial planners.
Our focus is sales and marketing use cases, though it's common to use as for answering basic FAQs as well.
A typical use case might be an e-commerce store uses ManyChat to qualify traffic from a Facebook ad. By giving the person an interactive experience such as a quiz before routing them to the right product landing page on the e-commerce store, they greatly increase the chance that person will make a purchase and as a result lower their cost of acquisition.
An online fitness coach might use ManyChat to nurture their audience. ManyChat can deliver content to potential customers in different stages of the funnel. The fitness coach can use ManyChat to offer customers a "lead magnet" such as a "5 tips for better health" free PDF download followed by an offer to sign up for a paid Webinar. The chatbot can then be used to remind people to attend the Webinar, follow up with recording, and then a week later with an offer for a paid seminar. The entire lead to sale lifecycle can be automated in Messenger with significantly higher open rates and conversion rates than email.
An offline business like a restaurant might use it to build an online audience that they can then engage for repeat business such as providing information on upcoming promotions or giving out loyalty points. Offline businesses can books appointments for salons, spas and gyms, or offload repetitive FAQs from customer support.
VN: What kind of ROI have you been able to calculate for businesses using ManyChat? Do you have hard numbers you can share?
MY: We have lots of great case studies on our blog at blog.manychat.com.
Some examples include a customer called Fit N Simple, which had 100x subscriber growth in six months, and over 730,000 subscribers after 18 months. Another customer, Blur Media, saw a 140 percent subscriber list increase in 2019, and 11 percent of its subscriber-based made an additional purchase which added an extra $30,000 in sales.
Some common sources of ROI include:
- Lowering cost of acquisition of advertising by routing ad traffic to an automated conversation to qualify and nurture leads vs. trying to capture emails or sending them to a landing page
- Increase leads and conversions to purchases through automated marketing funnels that drip the right content and offer to the right person depending on their level of awareness and interest
- Time & cost saved through not answering FAQs on email or the phone for the business owner
VN: Who are your competitors? What separates ManyChat from them?
MY: There are many companies that do various things in the automation/chatbot space. However we believe we are unique for a few reasons.
First, many "chatbot" companies have focused on AI and technology for technology's sake. The ones who have taken a more use case approach have focused on customer service and the ROI from deflecting support tickets. We've taken a strong focus on solving sales and marketing use cases, driving leads and sales.
Also, many competitors have focused on the mid market to the enterprise. ManyChat is focused on helping small businesses. This is reflected in the ease of use of our product, our price, and our self-service go-to-market model.
Finally, our product is completely visual, no-code drag and drop and designed for non technical users to get started and see value quickly. Businesses launch campaigns with ManyChat in hours or days, not weeks.
VN: How have you seen the messaging space evolve in recent years? What is your vision for where it’s going and how will ManyChat help it get there?
MY: It is becoming more common for businesses to use Messenger to connect with their customers. From small businesses to big brands, Messenger is becoming mainstream as a business-to-customer communication tool. However for every business to harness the power of messaging, they need automation. Even a big business can not staff enough people to have 1-1 personal conversations with every customer.
ManyChat's vision is to provide a smart blend of personal connection with automation. Automation for the conversations where a human is not needed, followed by seamless handoff to a human when needed.
We believe in the future, every business - online or offline, will be able to sign up for ManyChat and very quickly get started and create engaging customer experiences that are right for their business - from giving out a menu to offering a promotion or retargeting an interested customer.
The messaging revolution has fully taken over our personal lives with SMS, Messenger, WhatsApp, iMessage and a host of other apps. Same for our work lives with Slack, MSFT Teams and Skype for Business. Yet when we cross the customer to business divide this breaks down and we revert to email, the phone or social media. We believe in the future this will all happen over messaging apps and ManyChat is committed to helping businesses realize this vision.
VN: What will Ethan Kurzweil and Alex Ferrara bring to the company as a members of the board of directors?
MY: Ethn and Alex have a ton of experience guiding similar companies through many different stages of growth. We'll look to their experience to help us make the right decisions as we scale the company.
VN: What is your ultimate goal with ManyChat? Where do you want to see the company in the next 5 years?
MY: Our goal is to help small businesses grow by building meaningful relationships with their customers. Today we believe the best way to do that is over Messenger. Our commitment remains to small businesses and their growth regardless of platform or channel. In the future we will work to help businesses connect over multiple channels and manage their relationships with customers regardless of channel.
But most importantly we want to be a growth vehicle for customers. They should turn to ManyChat as they way they power their growth. Our product will encapsulate common growth strategies for different types of businesses so they can turn them on with a touch of a button. If you're a restaurant looking to grow your foot traffic or an e-commerce store looking to grow repeat purchases or a real-estate agent looking to grow buyers per listing - ManyChat will power these strategies without the business owner having to be an expert in either marketing or technology. ManyChat will be your expert marketer in a box that guides the business through the marketing part so they can focus on the craft of their business - whatever that might be.
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500 Startups is an early-stage seed fund and incubator program located in Mountain View, CA. They invest primarily in consumer & SMB internet startups, and related web infrastructure services. Their initial investment size is typically $25K-$250K.
Selected areas of interest include financial services & e-commerce, search/social/mobile platforms, personal & business productivity, education & language, family & healthcare and web infrastructure.
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In 1911, Henry Phipps founded Bessemer Securities to reinvest the proceeds of his sale of Carnegie Steel for the benefit of his descendents. The start-up investment operations were spun out into Bessemer Venture Partners, which now operates out of seven offices around the globe.