Serial entrepreneur Lars Albright is at it again, with his new startup raising $35 million to make good on its vision to become the Salesforce of mobile marketing.
Mr. Albright's five-year-old SessionM is pivoting away from its traditional approach to mobile-loyalty and advertising via discounts offered to consumers in exchange for watching videos and completing quizzes about Volvo and other big brands. Those engagement programs, which once had participation from more than 2,000 app makers, now represent less than 20% of the Boston-based startup's revenue and won't be a major focus going forward, according to Mr. Albright, chief executive officer. The new focus: gathering data about consumer behavior and then suggesting brands turn that knowledge into personalized, targeted offers.
"We can disrupt the traditional CRM space," said Mr. Albright, referring to the market for customer relationship management where Salesforce is a leader. Mr. Albright sold his previous startups to Apple and Verisign for reportedly about $275 million and $250 million, respectively.
Although SessionM has been growing at a good clip -- Mr. Albright says revenue was more than $25 million last year and the company will be profitable by mid-2017 -- it has entered a competitive market. Longtime CRM leaders Oracle and Salesforce, mobile rewards startups Belly and Swrve New Media, and customer targeting companies Mixpanel and Char Software, are just a few of dozens vying to help brands maximize profits by identifying customer patterns.
For SessionM, the challenge will be staying competitive while converting existing customers to its updated formula, adding new ones and balancing growth as it expands its team from the U.S. to Europe and Asia. The company said its customer list includes AT&T, Kimberly-Clark, Samsung Electronics and GlaxoSmithKline.
Jose Corella, a senior brand manager for Kimberly-Clark in charge of Huggies Diapers, said SessionM replaces a program which required customers to peel off a sticker from their Huggies package, get a 15-digit redemption code and enter it online. That rewards program, which he scrapped in late June in favor of SessionM, had a 5% to 10% monthly engagement rate and little to no data about the customer. With SessionM, the stream of customer information is like "opening up a spigot" he said.
"Now we know what you bought, where, and when so we can tailor promotions," he said. The Huggies team is still figuring out what the information means and how to best use it.
General Atlantic led the Series D round with participation from new investor Salesforce Ventures and existing investors including Kleiner Perkins Caufield & Byers. Investors valued SessionM at $205 million -- up from last year's $152 million, according to private stock market company Equidate. The company has raised a total of $74 million.
Jim Rossman, a special adviser at General Atlantic who previously served as president and chief operating officer at Akqa and chief operating officer at Digitas, joins the SessionM board.
-- Bloomberg News
