With the pandemic causing e-commerce sales to skyrocket, 2020 has served as an unlikely year of hypergrowth for Attentive. The text message marketing startup has more than doubled its employee count to 400 from 150 at the start of the year, and it now works with 2,000 customers, up from 1,000 just five months ago.
After a $110 million Series C raised across two tranches in January and April, the New York City startup on Wednesday closed a $230 million Series D funding round led by existing investor Coatue. The company has now raised $394 million total, with more than 80% of it coming this year, as it comfortably enters unicorn territory with a $2.2 billion valuation.
“The world is changing so fast, and companies that can be very nimble and adjust are going to do the best,” says cofounder and CEO Brian Long. “Things that can drive incremental revenue, increase online sales and make it easier to reach consumers are things that companies are putting to the front of the priority list—that’s really helped us become a priority.”
The Covid-19 pandemic has resulted in a more than $90 billion boost in online sales, according to Adobe’s Digital Economy Index. The surge has put e-commerce marketing at the forefront of sales strategies for retailers and creating an opportune moment for Attentive. The startup’s marketing and analytics software helps customers from Urban Outfitters to Jack in the Box go beyond plaintext to create messaging campaigns with rich media such as video, audio and GIFs. Companies can customize messages based on actions of its consumers, such as abandoning a shopping cart, or demographics, such as shoppers who live in New York City or the most frequent buyers.
“We believe that the right way to [do marketing] is to communicate across the customer lifecycle,” Long says. “That’s everything from marketing messages based on what consumers say they are interested in or they have bought before, to messages around the transaction—your order is on the way; do you want to leave a review; here’s a video of how to use the product.”
The software integrates with customer service and email software, such as Zendesk or MailChimp, to provide a smoother communication channel for retailers to interact with their consumers. Long says Attentive consistently creates a top three revenue channel for its customers, with click-throughs into text messages made in Attentive being responsible for 18.5% of retailers’ revenues on average.
Attentive was founded in 2016 by Long and chief product officer Andrew Jones, the cofounders of TapCommerce, a startup which helped apps target their advertising campaigns. The pair started their previous company in 2012, then joined Twitter two years later when the social media company acquired the business. This time around, Long has a longer-term vision for his company: “I think that in three to five years, the expectation for consumers is that they will be able to communicate with companies in real time, back and forth” to answer questions, make changes to orders, receive customer service or get updates on their transactions. Attentive, he says, will continue to expand on its product’s two-way communication functionality.
To do so, Attentive will use its new funds to scale its engineering, product and design teams. The startup, which has seen revenue growth increase ninefold over the past two years, is also experimenting with Facebook Messenger, WeChat and WhatsApp as other channels for its messaging product, Long says.
New investors in the Series D are Tiger Global, Wellington Management, D1 Capital Partners, Atomico and Sozo Ventures. The big money funding round also included follow-in investments from a number of firms, including Sequoia, Bain Capital Ventures and IVP.
Attentive has not even begun spending its Series C, meaning it has more than $340 million in cash on hand. According to Long, tech’s “survival of the fastest” landscape makes the latest funding round necessary for the company to sustain its hypergrowth. By the end of 2021, the company will have more than 1,000 employees, he forecasts.
“Building great software takes time, so we’re making that investment now,” he says. “Sure, we could have raised the money later to hire more people later but then we would be waiting.”