Cookies and other third-party data sources are going the way of the dodo bird for many companies, regulators and platforms, and that's giving a new emphasis on technology that will help companies better manage their customer data on their own steam. Today, one of the companies building tools for that end is announcing a big round of funding, underscoring its growth.
Amperity, which provides a customer data platform for its businesses, has raised $100 million in funding at a valuation of over $1 billion. The startup typically works with large, consumer-focused enterprises along the lines of Starbucks, Wyndham Hotels & Resorts, Patagonia and some 100 others, helping them to tap and organize their own data troves better to develop better profiles of their customers.
The Series D funding -- led by HighSage Ventures with previous backers Tiger Global Management, Declaration Partners, Madrona Venture Group and Madera Technology Partners also participating -- brings the total raised by Amperity to $187 million and comes two years after the company's Series C of $50 million.
The last year of increased online activity and online shopping has put a much bigger focus on the data that companies are amassing about their users and how they can better leverage that information to grow further. Amperity said that in 2020, annual recurring revenues were up 100%, partly on the back of that surge of interest in how to tap into customer data, not least because the older way of doing things has fallen out of favor.
Indeed, Kabir Shahani, the CEO who co-founded the company with CTO Derek Slager, believes that the trend away from third-party to first-party data has played and will play a much bigger role in Amperity's growth longer term.
"COVID certainly 'helped,' " Shahani said, "but to me the story is less about that and more about how our idea has been validated."
The idea he and Slager had been thinking about was the dependency, and problems with, third-party cookies, an issue that has been lingering "for decades," he said.
"When this idea started percolating, when we looked to start the company, we thought this must have already been solved. It was mind-blowing that it hadn't." The reason why: Data is in too many silos, and it's not connected, which renders it impossible or at the least very challenging to use.
Amperity's approach has been to build the connectivity to bring the data together out of its silos, and then to create ways to merge and make it useful. In that regard, it's not unlike another company that also got some funding today, Quantexa, which originally built something similar to track fraud but is now also going after the customer data platform business as well.
As with Quantexa, Amperity has taken the approach of treating this like a big-data problem that AI can help solve.
"At the root of this is a hard computer science problem, all the disparate data runs off different keys," he said. Some customer identifiers are based on phone numbers, some on physical addresses, some on email, and so on. "To connect all that you need one single key, but no one had done that before. So we thought, what if we tried to do that using machine learning?" They engaged "the world’s leading researcher in probabilistic data," who built the models for Amperity, and that's what powers the service today.
It's a massive market worth over $114 billion, so it's no surprise to see investors like Tiger Global looking to get involved.
“Amperity represents the future of how customer data can benefit both consumers and businesses by offering the most comprehensive AI-driven CDP on the market today,” said John Curtius, partner at Tiger Global Management. “The company’s technology is bringing outsized value to the biggest and most admired consumer brands in the world. Additionally, they continue to attract exceptional talent at all levels of the company to advance their mission, including the addition of Starbucks CEO Kevin Johnson to its board last year.”