Similarweb Raises $120M for AI-Powered Market Intelligence

The Israeli company SimilarWeb has established itself as a leader with its artificial intelligence-driven platform, enabling businesses to monitor and analyze website and application traffic – not only for their own digital properties but also for their competitors. The company is now advancing its expansion plans. SimilarWeb has secured $120 million in funding, which will be allocated to further develop its platform through strategic acquisitions and continued investment in its own research and development efforts, with a particular emphasis on delivering enhanced analytics solutions to larger enterprise-level clients, in addition to its existing customer base of individuals and businesses operating online.

However, an initial public offering is not currently under consideration.

The funding round was jointly led by ION Crossover Partners and Viola Growth, bringing the total amount of capital raised by the startup to $240 million. Offer stated that the company is not disclosing its current valuation but confirmed that it is now “competing at a higher level.” The company’s clientele includes over half of the companies listed on the Fortune 100, such as Walmart, Procter & Gamble, Adidas, and Google.

For reference, the company’s previous equity round in 2017 resulted in an $800 million valuation.

SimilarWeb’s technology operates within the competitive landscape of analytics and market intelligence providers, including companies like Nielsen, ComScore, and Apptopia. At its core, it provides users with a dashboard offering valuable insights into online activity on both desktop and mobile platforms. Offer explained that the company distinguishes itself through its data acquisition methods and the additional analytical capabilities it provides.

Specifically, it goes beyond simply quantifying website visits to investigate the underlying reasons for that activity – the “why” behind user engagement. Utilizing advanced AI technologies, including machine learning and deep learning – areas of particular strength within the Israeli tech sector – SimilarWeb analyzes data from various sources to generate its insights.

While Offer refrained from detailing these sources, he expressed support for the implementation of privacy regulations and cookie policies, believing they help identify and eliminate less reputable “analytics” services. He also affirmed that SimilarWeb has not been negatively impacted by the shift towards greater data protection, as its approach differs from traditional data collection methods. The company is also exploring opportunities to broaden its data sources:

“We are continually evaluating potential new data signals,” he explained. “This could include Content Delivery Networks, for example. However, much like Google’s search ranking algorithms, the pursuit of maximum accuracy is an ongoing process.”

The global health crisis has significantly increased online activity this year, as individuals have turned to websites and applications for both entertainment – to fill time during lockdowns and replace cancelled events – and for essential business functions, such as online shopping and remote work solutions.

This surge in online activity has, in turn, benefited companies that support the digital infrastructure, including SimilarWeb.

“Business needs are evolving rapidly, and all companies require improved visibility into these changes,” Offer stated. “Initially, we saw increased demand for products like toilet paper and hand sanitizer, then for home office equipment. Now, the need extends beyond e-commerce to encompass all sectors. Consider large banks, where 70% of their business was previously conducted offline, but is now 70-80% online. Businesses are undergoing a significant digital transformation.”

This transformation is driving increased demand for tools that can measure the effectiveness of a company’s online presence, with the central question being: “What is my market share, and how does it compare to my competitors? Digital visibility is paramount, particularly during times of change.”

Offer noted that, like many businesses, SimilarWeb experienced an initial downturn, and as a result, participated in Israel’s Paycheck Protection Program to help maintain employment for some furloughed staff. However, he added that the majority of its pre-pandemic customers have returned, alongside new clients from previously less active sectors, such as automotive portals.

This shift in the customer base is also creating new opportunities for the company. Offer observed that in recent months, many large enterprises – who may have previously accessed SimilarWeb’s technology indirectly through consulting firms – are now engaging with the company directly.

“We have launched a new advisory service [where] our experts collaborate with large clients to address complex questions regarding the data we provide. These are questions that all major businesses are currently facing.” This service combines educational support for companies less familiar with digital strategies with traditional consulting services.

These new customer segments and evolving business priorities were key factors in driving this funding round, according to investors.

“SimilarWeb has always been an invaluable resource for digital professionals,” said Gili Iohan of ION Crossover Partners, in a statement. “However, in recent months, it has become clear that traffic intelligence – the unparalleled data and digital insights that SimilarWeb provides – is essential for any company seeking success in the digital landscape.”

Regarding acquisitions, SimilarWeb has historically used them to accelerate its technological advancements. For instance, the acquisition of Quettra in 2015 expanded its capabilities in mobile analytics, and the acquisition of Swayy enhanced its content discovery insights (crucial for e-commerce intelligence). Offer did not provide specific details about potential targets but suggested that the current proliferation of companies developing similar technologies could lead to consolidation around larger platforms to integrate features and functionality. He stated that the company is seeking “companies with strong data and digital intelligence capabilities, and a compelling product. There are numerous opportunities available at present.”

The company also plans to expand its workforce, aiming to add 200 employees globally by January (currently employing around 600 people).

“Over the past three years, SimilarWeb has undergone a strategic transformation from a general-purpose measurement platform to vertical-based solutions, significantly expanding its market reach and delivering substantial value to its customers,” said Harel Beit-On, Founder and General Partner at Viola Growth, in a statement. “With a strong management team of experienced executives, we believe this funding round positions the company to dominate the digital intelligence category and capitalize on the accelerating digital era.”