PubNub Raises $65M for Real-Time Data Streams | Virtual Spaces

The Rise of Real-Time Data Streams and PubNub's Growth

Modern applications and websites heavily rely on continuous, real-time data updates for their functionality. A startup specializing in powering these data streams, PubNub, has recently secured new funding to fuel its expansion into diverse use cases.

Expanding Platform and Geographical Reach

PubNub, a provider of APIs for messaging and data updates, has raised $65 million in a Series E funding round. The San Francisco-based company intends to utilize these funds to enhance its platform's capabilities and broaden its geographical presence. A new Asia Pacific office in Singapore is planned as a first step in this expansion.

Significant Scale and Customer Base

Currently, PubNub’s APIs are utilized across approximately 600 million devices in over 70 countries. These APIs generate around 21 petabytes of data monthly, supporting roughly 900,000 developer projects. Notable customers include prominent companies such as Adobe, Atlassian, DocuSign, and RingCentral.

Key Verticals and the "Virtual Spaces" Concept

The company is experiencing substantial growth in sectors like gaming, virtual events, enterprise collaboration, chat applications, rideshare and delivery services, telehealth, connected fitness, and smart home products. These areas all depend on the concept of “virtual spaces” where constant data streams – such as delivery progress or activity tracking – are integral to the user experience.

Vision and Evolution of the Platform

“We’re witnessing a surge in customer innovation with PubNub,” stated Todd Greene, CEO and co-founder of PubNub. “Our initial vision centered on powering virtual spaces through messaging, but customer needs evolved, demonstrating that communication alone was insufficient.”

Investment Details and Valuation

Raine Group led the funding round, with participation from Sapphire Ventures, Scale Ventures, HPE, and Bosch. While PubNub hasn’t disclosed its current valuation, it has raised over $130 million to date. PitchBook previously estimated its valuation at approximately $220 million in 2019.

Growth Metrics and Behind-the-Scenes Operation

Greene confirmed that the startup’s valuation has “increased significantly” since 2019. Although specific data volume figures aren’t being released, customer bookings grew by 200% year-over-year in 2021. PubNub operates discreetly, with its APIs functioning without prominent branding.

The Increasing Importance of Digital Infrastructure

A growing number of daily activities are conducted or influenced by digital experiences. These experiences are becoming increasingly sophisticated, offering enhanced functionality, data access, and user interfaces. Consequently, demand for the underlying infrastructure supporting these advancements is rising, attracting both business growth and investor attention.

The Metaverse and the Future of Virtual Spaces

The recent surge in interest surrounding the “metaverse” may further benefit companies like PubNub, which focus on powering virtual spaces. However, the broader trend involves the ongoing evolution and operation of these services, extending beyond the hype.

Competitive Landscape

PubNub is not alone in this space. Companies like Twilio, SendBird, MessageBird, and Sinch also provide API-based messaging and communication services. Direct competitors offering API-based data update solutions include Ably, Cometchat, and Google’s Firebase.

PubNub’s Unique Selling Points

PubNub differentiates itself through its global reach, with points of presence ensuring compliance with regional data protection regulations like HIPAA, GDPR, and SOC 2 Type 2. The platform is also continually expanding its functionality, both natively and through integrations, all managed via a centralized dashboard. Current services include in-app chat, geolocation, virtual events, push notifications, and IoT services.

Addressing Concerns About Notification Fatigue

Some might assume that a shift towards fewer notifications could negatively impact PubNub. However, Greene argues that this isn’t the case. He notes that the majority of messages are in-app updates, such as tracking a delivery, and that Apple and Google are not restricting these types of data pushes.

The Value of Raine Group’s Network

The lead investor, Raine Group, brings significant value beyond capital. The firm boasts an extensive network of customers and has been involved in numerous M&A deals with major companies like Apple, Tencent, and Uber, potentially opening doors for PubNub’s business development and customer acquisition.

Investor Perspective

Christopher Donini, managing director of The Raine Group, stated, “We are excited to partner with PubNub, powering the future of real-time digital and social experiences. Their solution provides reliability, security, and low-latency, addressing a critical need for developers.” Donini and Kevin Linker will join PubNub’s board of directors.