Investments

Customer Data Startup Segment’s Value Balloons To $1.5B

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Segment, a data collection startup that helps companies manage customer data, has raised $175 million in funding, according to a report by Bloomberg.

Previous investors Accel and Alphabet outfit GV led the round with Meritech Capital Partners. Other investors include the Y Combinator Continuity Fund and Thrive Capital. The California-based company has a valuation of $1.5 billion.

The company works by helping businesses like Atlassian, Intuit, IBM and Glossier combine all the ways that a company can collect data. Those methods include in store, email, mobile and others.

Glossier has 14 different analytics tools throughout 12 platforms, including website, store, mobile app and others, according to Segment Chief Executive Officer Peter Reinhardt.

“Each tool has its own copy of the customer data and history of privacy preferences,” he said. “You can imagine the sort of complexity Glossier has to deal with.”

Accel Partner Vas Natarajan has been on the Segment board since 2014, when the company led a $15 million funding round. Calling the startup a  “Salesforce-sized opportunity,” he said, “For a company, it’s really hard to stitch all that data together into a single customer profile, to answer, ‘What were all my interactions with this person this month?’” 

Reinhardt said Segment also helps with privacy issues and safeguards, which is especially attractive to companies in what he called a “massive uptick” of people attempting to make sense of how public or private their data is. Segment has also started a campaign for businesses to help them with data-deletion queries and compliance with the European Union’s General Data Protection Regulation (GDPR) laws.

The Segment story has taken quite a few twists before the company found its footing. It started as a product in 2011 to help college students tell professors when they were confused, but it failed because a lot of the students ended up using Facebook instead.

Then, the founders tried to build an analytics tool before figuring out that the workings of the product were more valuable than the product itself. Segment plans to use the new funding to hire more international workers.

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