optimove Raises $75M to Scale Customer Journey Management
The Importance of Personalized Customer Connections
Establishing strong, personal connections with customers is a key driver of brand loyalty. However, evolving consumer behaviors, particularly those observed in the last year and a half, have made it increasingly challenging to cut through the noise and forge these vital relationships.
Optimove's Growth Investment
Optimove, a company specializing in customer relationship management (CRM) marketing, aims to empower brands to enhance customer experiences and foster repeat business. The firm, which maintains offices in Tel Aviv, New York, and London, has secured $75 million in growth funding, led by Summit Partners.
Founded in 2012 by CEO Pini Yakuel, Optimove leverages artificial intelligence to analyze customer data and deliver the most relevant message to each individual, at the optimal moment, and on a large scale, as Yakuel explained to TechCrunch.
Scaling Customer Journey Orchestration
“Managing a handful of customer journeys each month is relatively straightforward. However, scaling to thousands of journeys presents significant complexities,” he stated. “Our AI orchestrators govern all messaging, allowing marketers to define the core message while benefiting from comprehensive data and detailed analysis of customer segments.”
With the global multichannel marketing market projected to reach $28 billion by 2027, Yakuel emphasizes the importance of understanding a brand’s customer base and tailoring marketing efforts accordingly. Optimove’s data analysis provides actionable insights to improve key metrics like customer churn, conversion rates, reactivation, and lifetime value for both individual customers and entire campaigns.
Bootstrapped Beginnings and Future Expansion
Prior to this funding round, Optimove operated on a bootstrapped model for its first four years before raising $20 million. Remarkably, the company has remained profitable without utilizing those initial funds. Yakuel views the current investment from Summit Partners as a strong vote of confidence and a buyout of earlier investors.
“This represents a transition to a new phase for our company,” he added. “Given the current fundraising environment, the timing felt right. We also intend to explore potential mergers and acquisitions (M&A) and expand our platform, all while ensuring a seamless experience for our users.”
Strategic Growth Plans
Optimove plans to double its workforce of 300 employees over the next two years. Investment will also be directed towards technology, research and development (R&D), and engineering to better serve its 500+ brand clients, which include prominent names like BetMGM, Papa John’s, and Staples.
The company has experienced a 40% increase in annual recurring revenue over the past year. It currently delivers over 23 billion optimized messages annually through various channels – email, mobile, advertising platforms, and more – to more than 3 billion customers.
Looking Ahead: Potential IPO
Yakuel anticipates the company’s next major milestone will be an initial public offering (IPO) within the next three years.
As part of the funding agreement, Han Sikkens, Head of Europe at Summit Partners, and Managing Director Steffan Peyer will join Optimove’s board of directors.
Summit Partners' Perspective
Peyer explained that Summit Partners focuses on investments in marketing technology companies that prioritize understanding the customer journey, a factor that has become increasingly critical during the global pandemic. He noted that the rising cost of acquiring new customers makes Optimove’s ability to engage existing user bases particularly valuable.
“They have developed a sophisticated customer data platform, coupled with a powerful analytics and orchestration engine. This system is built on a foundation of understanding and analyzing customer behavior, enabling targeted micro-segment campaigns to maximize engagement and identify opportunities for cross-selling,” Peyer said. “Their modeling benefits from a robust backend infrastructure capable of processing data at scale and leveraging that information in real time.”
