Funnel Raises $66M to Unify Marketing Data - No-Code Solution

The Rise of Marketing Technology and Funnel's $66 Million Funding

The marketing landscape has undergone a significant transformation, increasingly reliant on marketing technology. However, many marketers lack the engineering expertise needed to effectively manage the vast amounts of data generated by their campaigns. Addressing this challenge, Funnel, a Stockholm-based startup offering a no-code platform for data management, has announced a $66 million funding round.

A Pre-IPO Round and Future Plans

Funnel characterizes this funding as a “pre-IPO” round, indicating it will be the final investment before a planned public offering, anticipated within the next six to eighteen months, likely on its home market. This substantial investment highlights the growing demand for tools that simplify marketing data management.

Investment Details and Company Growth

The round was co-led by Fourth Swedish National Pension Fund (AP4) and Stena Sessan, with participation from existing investors including Balderton Capital, Eight Roads, F-Prime, Oxx, and Industrifonden. While the company isn't disclosing the exact valuation, CEO and co-founder Fredrik Skantze confirmed it is significantly higher than the $47 million valuation from its Series B round in January 2020.

Funnel currently serves approximately 1,200 large customers, with around half located in the United States. Notable clients include Home Depot, trivago, Skechers, Samsung, Vodafone, Logitech, Skyscanner, SAS – Scandinavian Airlines, Havas Media, Ogilvy, and DAC Group.

The Shift to Digital Marketing and Data Complexity

A considerable portion of marketing expenditure, around 60%, is now allocated to digital channels, despite the continued relevance of traditional methods like outdoor, print, and television, which still account for 40% of spending. This shift is driven by the increased measurability offered by digital marketing.

Digital engagement – through social media interactions, link clicks, and information sharing – provides marketers with valuable data. Consequently, the number of data sources marketers utilize has expanded dramatically.

From Seven to Seventy: The Growing Data Challenge

“Four or five years ago, a marketer typically used seven data sources,” explains Skantze. “That number has grown to 10, and now our customers often manage 20 to 30, or even 70 to 80 sources.” Managing this complexity becomes particularly challenging for companies operating in numerous markets.

Previously, marketers relied on spreadsheets or campaign-specific tools for data analysis when dealing with fewer platforms. However, this approach is no longer sustainable given the increasing volume and complexity of data, and the growing expectations for actionable insights.

The Need for Data Scientists and the Funnel Solution

Effectively working with this data often necessitates the involvement of data scientists to organize and present it in a usable format. Simply accessing raw data is insufficient; platforms like Facebook alone offer 700 metrics, requiring normalization and business-readiness, often through tools like SQL.

“It’s not enough to simply use the raw data,” Skantze emphasizes. “Facebook alone has 700 metrics, and the data you will get from a campaign just goes to a data warehouse. So you have to make it business-ready, you have to normalize it.”

Funnel's No-Code Platform: Empowering Marketers

Funnel’s platform addresses this challenge by “reading,” organizing, and reporting on datasets from various campaigns. It utilizes pre-designed rules or allows for custom configurations. Currently, it supports 550 different data sources, continually adding more as customer needs evolve.

Through an intuitive interface, non-technical marketers can perform tasks previously requiring IT support, such as data staging. This empowers them to directly interact with and understand their marketing data.

Focus on Marketing: A Differentiating Factor

A key differentiator for Funnel is its specific focus on marketing data, setting it apart from broader business intelligence (BI) tools. While BI tools offer versatility, they often lack the depth required for comprehensive marketing analysis.

“Five years ago I would have thought that BI tools would solve this, but the problem is that they are too horizontal,” Skantze states. “Within marketing it might cover only five data sources, while we have 550.”

Future Challenges and Opportunities

Despite its promising trajectory, Funnel faces evolving challenges. Growing privacy concerns, stricter data regulations, and the emergence of synthetic datasets could impact the reliance on traditional marketing data. Changes in platform policies, such as Apple’s tracking restrictions, also present hurdles.

“The restrictions that Apple has placed on tracking on iOS has had a big impact especially for B2C companies,” Skantze said. “They are not seeing the same level of performance as before.”

However, Funnel views itself as a neutral data processor, akin to Switzerland, focusing on data extraction and understanding rather than the mechanics of adtech.

Expansion Beyond Marketing

Looking ahead, Funnel plans to expand its capabilities beyond marketing, already supporting data integration for sales and e-commerce teams, and exploring opportunities in the finance sector. This diversification strategy aims to capitalize on the broader demand for accessible data management solutions.

Institutional Investment and IPO Preparation

The “pre-IPO” round is designed to attract institutional investors who will participate in the upcoming public offering. Investors like AP4 and Stena Sessan express confidence in Funnel’s long-term potential and its ability to succeed in the public market.

“We are long-term investors who look for companies we like and hold them for a long time,” said Jannis Kitsakis, senior portfolio manager at AP4. “We were impressed with the size of the global opportunity and the team’s ambition to build a large software company.”

“Funnel has shown strong, predictable growth with impressive go-to-market metrics and a global footprint,” added Fredrik Konopik, Investment Director at Stena Sessan. “We feel that the company is well positioned for the public market in Sweden.”