The world of marketing has become a world of tech marketing. But marketers aren’t necessarily engineers, so working with the terabytes of data produced by their campaigns can be a challenge. Today, a Stockholm startup called Funnel, which has built a codeless platform to help manage this process, announces funding of $ 66 million, a growth cycle that underscores market demand for such tools. Funnel describes it as a âpre-IPOâ cycle: this will be its last before it goes public, likely in its home market, and probably in the next six to 18 months.
The Swedish Fourth National Pension Fund (AP4) and Stena Sessan are co-leading the tour, with participation from previous funders Balderton Capital, Eight Roads, F-Prime, Oxx and Industrifonden, among others. Fredrik Skantze, co-founder and CEO, said the company was not disclosing its valuation, but said it was significantly higher than its pre-currency valuation in its last round, a pre-pandemic Series B of $ 47 million in January 2020.
As a measure of Funnel’s size, the company has approximately 1,200 large customers, about half of which are in the United States. They include brands like Home Depot, trivago, Skechers, Samsung, Vodafone, Logitech, Skyscanner and SAS – Scandinavian Airlines, as well as Havas Media, a division of the French advertising and public relations giant, Ogilvy and DAC Group.
The challenge Funnel is tackling is that marketing has become a massively digitized business: although billboard, print, TV and other analogue campaigns still account for 40% of marketing spend, that leaves 60% digital. .
This is a proportion that is still growing sharply, especially because digital marketing provides a more measurable image of the effectiveness of a campaign: people engage and react on social networks; they click on links; they share information with other platforms. The growing ubiquity of digital marketing also means that the data sources that a marketer typically uses are also increasing.
âFour or five years ago, a marketer typically used seven data sources,â Skantze said. âThen that number rose to 10. Now our customers can use 20 to 30, even 70 or 80 data sources. If you are active in 50 markets, it becomes a complex problem.
But this also poses a data problem. When there are fewer platforms and marketing campaigns running, a marketer has typically relied on spreadsheets to analyze data or tools specific to a single campaign. However, this becomes untenable as data sources increase and the expectations of what marketers want to get from that information increase with them. Working with the data produced therefore generally requires the help of a data scientist to organize them in order to make them more usable.
âIt’s not enough to just use the raw data,â Skantze said. âFacebook alone has 700 metrics, and the data you get from a campaign just goes into a data warehouse. So you have to prepare it for the business, you have to standardize it. It means using something like SQL. And that means the marketers themselves can’t work with this data funnel directly.
Funnel’s platform is able to ‘read’, organize and report for the different datasets that come out of these campaigns, using pre-designed rule sets or that a company can customize for themselves – same. He currently manages some 550 different data sources (from social media platforms to search engines and much more: basically any digital platform that could be used by a marketer to run a campaign). And it adds more and more as customers use them, Skantze said. Through drop-down menus, non-technical marketers can do, he said, “all the things they would have previously asked an IT person to do, to stage the data.”
The key is also that it is focused on marketing, which also sets it apart from other competitors by providing low-code tools to help organize data for other business intelligence or reporting applications.
âFive years ago, I would have thought that BI tools would solve this, but the problem is that they are too horizontal, and cover all types of data, whether marketing, geographic, financial, etc. So inside the commercialization might only cover five data sources, when we have 550, âhe said. âYou can’t solve the problem of extracting data unless you’re vertical in some sort of segment. It’s the same with snowflake: it has 200 connectors but they are in too many areas.
Funnel’s future growth may seem almost assured: more online activity leads to more marketing activity, and marketers are expected to report and provide more, not less, information about what they are doing and finding out about. their clients. On the other hand, the market is changing. People don’t want to be followed; regulations come into force that make it more difficult to collect marketing data; there are a growing number of technologies looking for ways to create âsyntheticâ datasets that could mean less reliance on data mining from marketing campaigns, which could mean less business for the funnels of the world; and platforms are also changing their tone.
âApple’s restrictions on tracking on iOS have had a big impact, especially for B2C businesses,â Skantze said. âThey don’t see the same level of performance as before. This is something our customers are concerned about, but so far it has not affected us. Our role is to extract the data, so that others can understand it. We are a bit like Switzerland here. We are one step away from the mechanics of adtech.
Regardless of how it evolves, it’s a good argument to branch out to cover more than just marketing in your platform.
There are a number of tools on the market today that are also creating ways to better order data treasures so that they can be used for better business intelligence. They include Collibra and Acryl and many more. The key with Funnel is that it’s marketed firmly as a tool for non-technical people, and it was built with marketing in mind, Skantze noted. That being said, the company plans to expand beyond marketing over time. âWe are already mining data for sales and e-commerce teams,â he said, and he also plans to offer data reporting tools for the financial industry.
The âpre-IPOâ rounds as part of this latest fundraiser consist of bringing in institutional investors who will also be part of the IPO process.
âWe are long-term investors who look for companies that we like and hold them for a long time. We were impressed with the scale of the global opportunity and the team’s ambition to build a great software company, âsaid Jannis Kitsakis, senior portfolio manager at AP4, in a statement.
âThe funnel has shown strong and predictable growth with impressive go-to-market metrics and a global footprint,â added Fredrik Konopik, chief investment officer at Stena Sessan. âWe believe the company is well positioned for the public market in Sweden.