App optimization company Appboy Inc. has raised $15 million in a round that reflects investors’ enthusiasm for mobile-marketing services.
The New York-based startup allows marketers to gather data about their app users and then, based on usage and spending patterns, find better ways to engage them. Like competitor Flurry Inc., which Yahoo acquired earlier this year, and Upsight Inc., which was created in the merger of Kotagent Inc. and PlayHaven Inc., Appboy allows its customers to drop an SDK, or software development kit, into their apps.
After collecting the swipes and clicks of each user, those companies then analyze the data so clients know more about each user. Depending on factors, like the amount of money the user spent and frequency of use, the company can then decide how to best engage them.
Venture investors are hot on the space, having backed more than a dozen such startups in recent years, including Kahuna Inc., Urban Airship Inc., Swrve Inc., Localytics Inc. and Leanplum Inc.
Appboy Chief Executive and co-founder Mark Ghermezian said investor enthusiasm for his New York-based startup was high.
“There was lots of inbound interest so we didn’t do a roadshow. Investors found us and we picked three to entertain,” said Mr. Ghermezian. He added that he initially sought to raise $10 million and could have easily raised $25 million.
The 50-person company aims to double head count during the next year or so and focus mainly on sales and marketing. Appboy’s technology, which also allows clients to engage users via app push notifications, in app messaging or other means, will be rolled out to increasingly large enterprise users, according to the company plan.
LifeLock , Shutterfly, USA Today Sports and Urban Outfittersare among Appboy’s 1,000 or so customers now paying for the monthly service. The average deal size is $75,000 a year, although a few larger contracts are multiyear deals worth as much as $600,000, Mr. Ghermezian said.
InterWest Partnersled the round, with participation from existing investors Icon Venture Partners, Blumberg Capital, T5 Capital and IDG Ventures. Early investors including Metamorphic Ventures, Bullpen Capital and Accelerator Ventures, didn’t invest because there was no room in the round, Mr. Ghermezian said.
“They wanted to participate,” he said.
InterWest General Partner Doug Pepper joins the board.
The round brings total outside funding to the three-year-old startup to $22.6 million.
