Marketing tech has dominated the marketing industry. Marketers are not engineers. It can be difficult to work with the many terabytes worth of data that their campaigns generate. Funnel, a Stockholm startup, has announced $66 million funding. This growth round underscores the need for such tools. Funnel describes this pre-IPO round as a funding round. It will be the last before it files for public offering, most likely in his country and within six to 18 months.
Stena Sessan and Fourth Swedish National Pension Fund, (AP4), are co-leading this round. Previous backers Balderton Capital and Eight Roads, F-Prime and Oxx also participated, among other things. Fredrik Skantze is the CEO and co-founder of the company. However, he stated that the valuation was significantly higher than the pre-money valuation from its previous round (a $47 million Series A in January 2020).
Funnels has approximately 1,200 large customers. About half of these are in the U.S. These include brands such as Skechers and Home Depot as well as Skechers and Skechers.
Funnel's challenge is to overcome the fact that marketing is now a hugely digitalized business. Although outdoor, television, and other analogue campaigns still make up 40% of marketing spends, 60% of that is now digital.
This is a significant percentage that is still on the rise. Digital marketing gives a better picture of campaign performance: people interact and respond to social media, they click on links, they share information to other platforms. Digital marketing is becoming more common, which means that data sources used by marketers are increasing.
Skantze stated that marketers used seven data sources in the past four to five years. Skantze said that this number has risen to 10. Our customers may now use 20-30, 70 or 80 data sources. This becomes a complicated problem if you are involved in 50 markets.
This also presents a data problem. Marketers have relied on spreadsheets or tools that are specific to one campaign to analyze data when there are fewer platforms and campaigns. This becomes less practical as data sources increase and marketers' expectations grow. To make the most of the data produced, a data scientist is needed to organize it and report it in a more useful way.
Skantze stated that it is not enough to just use raw data. Facebook has 700 metrics. The data that you get from a campaign goes straight to a data warehouse. Normalizing it is a must to make it ready for business. This means that you will need to use SQL. Marketers cannot use that data funnel directly.
The Funnels platform can read, organize, and create reports for various datasets that result from these campaigns. It uses pre-designed rules or can be customized by companies. It currently manages 550 data sources, including search engines and social media platforms. Skantze stated that it is constantly growing as customers use it. Non-technical marketers can use drop-down menus to perform all the tasks they would have to ask an IT professional to do to stage the data.
Its focus on marketing is also key. This sets it apart among other competitors by providing low-code tools that help to organize data for business intelligence and reporting applications.
Five years ago, I would have believed that BI tools could solve this problem. But the problem is that they are too vertical and can cover any type data, including marketing, financial, geographic, or other types of data. He said that it may only cover five sources of data within marketing, when we have 550. If you're not vertically organized in a segment, it is impossible to solve the problem of pulling the data. The same applies to snowflake. It has 200 connectors, but they are too scattered.
Future growth for Funnels may seem certain: More online activity leads to more marketing activity. Marketers are expected to report more and give more insights about what they do, and what they discover about their customers. The market is changing, however. People don't want to be tracked. There are new regulations that make it more difficult to collect marketing data. Technology is growing that seeks to create synthetic datasets. This could reduce the reliance on marketing campaigns for data, which could lead to less business for the Funnels. Platforms are also changing their tune.
Skantze stated that the restrictions Apple placed on iOS tracking has had a significant impact on B2C businesses. They aren't seeing the same level performance as before. This is something that our customers are concerned about, but it has not affected us. Our job is to extract data so others can understand it. Here, we are somewhat like Switzerland. We are just a step from the mechanics behind adtech.
This is an argument to diversify your platform, regardless of how it develops.
Today, there are many tools on the market that can help you order better data troves. This will allow you to use them for business intelligence. Collibra, Acryl, and many other tools are among them. Skantze said that Funnel is designed to be used by non-technical users and has been developed with marketing in mind. Skantze said that the company plans to expand beyond marketing in the future. He said that the company is already collecting data for sales and e-commerce and that it is looking to provide data reporting tools for finance.
In the context of this recent fundraise, pre-IPO rounds are about bringing in institutional investor who will also be a part the IPO process.
Long-term investors are those who invest in companies they like and keep them for a long period of time. Jannis Kitsakis (AP4), senior portfolio manager, stated that we were impressed by the potential global opportunities and the team's ambition to build a large company in software.
Fredrik Konopik (Investment Director at Stena Sessan), said that Funnel has demonstrated strong, predictable growth, with impressive go-to market metrics and a worldwide footprint. We believe that the company is well-positioned to compete in the Swedish public market.
