9 ms·

Optimizely Raises $28 Million to Go Global

123 points by jwblackwell 14y ago

josephby 14y ago
Optimizely is a fantastic product; no doubt it creates a lot of value for its customers. That said, it's very difficult for tool vendors (Visual Website Optimizer, Optimizely, Unbounce, etc.) to capture a lot of that value. This deal makes sense in so far as Google, Adobe, etc. will need to buy up all the players in this space so as to beef up their advertising or web tool offerings.
- karolisd 14y ago
  As Optimizely's CEO is an ex-Googler and Google's current A/B testing tool is crap, I'm just waiting for when Google buys Optimizely. Right now, Optimizely is growing so fast that they haven't reached a place where they'd maximize their price, but I think an acquisition inevitable once their growth plateaus.
- netcan 14y ago
  Google don't seem to be advertiser friendly in the same way they used to be. Adwords is increasingly becoming a black box where advertisers aren't really encouraged to understand what is going on. In all lot of cases they seem to want to deny advertisers information. I'm not sure what the thinking behind this all is but I suspect one of the biggest reasons is leveraging data without exposing it to advertisers or allowing them to do creepy seeming stuff. That doesn't mean Google won't buy them or won't want to provide these kinds of services. They do provide a crappy product in this category which has very few use-cases these days. Anyway $28m considering the SAAS/SME model should be viable at a range of scales. I wonder if they are planning any big changes that require this kind of cash. Maybe something freemium or a new product that will take a lot of time before it can be profitable. Just speculating.
- pbiggar 14y ago
  You say that, but the article claims >$10m annual revenues. It sounds like they're having no problem capturing that value.
- magikbum 14y ago
  Google Ventures is part of this round of investment and prior rounds too.
  - rhokstar 14y ago
    ... and awaiting the right moment to acquire!
deleted 14y ago
[deleted]
petenixey 14y ago
Aside from just what a solid company Optimizely is, I think that if you read Dan's blogpost you get a hint at the ultimate direction they may be going. "We firmly believe that 10 years from now people will look back at today and be shocked at how generic, impersonal, and one-to-many what we call the web is... We are striving to become the layer on top of the web that powers that experience." I'd guess that Optimizely may be becoming less about page optimisation and more about experience optimisation. Should my navigation and experience at Tesco be the same as that of a mother of four or a student? My recommendations may be personalised but what if the entire experience at the site including the advertising, design and calls-to action could be personalised and optimised for key customer segments. If you've ever used Test and Target you'll know that it can get pretty complicated but equally that that that sort of segmentation can equally have a huge impact. If Optimizely can pull off a way to easily curate site experiences for different visitor segments and perhaps intertwine those experiences with social then they could have some huge topline impact in those companies.
- mvartak 14y ago
  yeah, i thought so too! The personalization/recommendation space is super crowded though -- it'll be interesting to see how Optimizely tackles it.
  - garagemc2 14y ago
    Quite easily. Take a look at Monetate's website. No transparent pricing. Making it clear what the costs is and making the set up ridiculously easy. Exactly the same strategy as they did with A/B testing.
    - jonahx 14y ago
      It's shocking to me whenever I see company nowadays that makes you contact them for pricing.
      - modoc 14y ago
        It is unfortunately a necessary evil of most enterprise sales situations. My company started out by providing clear, public, easy to understand pricing on our website. We quickly discovered that many large companies expect to get large discounts off of "list" price, and even if your pricing is on par with, or less than your competitors, you end up talking to people who say things like "I won't sign anything if I don't get at least 20% off list price". It's a weird weird world. Companies like Oracle who routinely discount 80+% off of "list" set these expectations in the market.
lucian1900 14y ago
Why do people call things `verb`ly? Does it make more sense to native English speakers than to me? Some even go through the trouble of getting a Libyan domain, which is simply foolish.
- lingben 14y ago
  I think we'll look back on this and other similar fetishes like .io TLDs and laugh just like we chuckle at the geocities web designs and AOL CDs of yore.
  - lucian1900 14y ago
    .io sort of makes sense as I/O, and is from a less unstable territory to boot.
  - sudonim 14y ago
    As a .io company... when we bought our domain over a year ago, the only other io I had heard of was http://drop.io http://drop.io (now gone). It has been nuts how many other new companies became .io in the past year.
- simonw 14y ago
  Because all of the dictionary domain names went a decade ago.
- netcan 14y ago
  IMO, it's just a formulaic way of naming a company that sends a predictable message. In the 90s, dotcom meant internet startup. 'noun'dotcom told people it's an internet startup to do with noun. verbly or nounify tell people this is a post bust, Web 2.0-ish company to do with noun/verb. 'x'soft, 'y'systems, 'q'solutions... There are lots of ways this is done. Once a convention is established, it's just an easy way of naming a company that projects more or less the right signal and getting on with things.
  - lucian1900 14y ago
    I'm saying the word doesn't make sense to me. "Quickly" makes sense. "Jumply" doesn't mean anything. "Bookify" sort of makes sense, vaguely.
netcan 14y ago
Slight tangent: What are the benefits/reasons for a company to be so public about raising investment? Is just a good opportunity for name recognition boosting PR? For some reason, this seems strange https://dl.dropbox.com/u/131615/screenshots/Screen%20shot%202013-04-10%20at%2016.31.27.png https://dl.dropbox.com/u/131615/screenshots/Screen%20shot%20...
- jamesjyu 14y ago
  One benefit is that if you're going after big businesses and enterprises, they want to make sure your product has longevity. This proves that it's not just a couple guys in a garage with no resources.
- orangethirty 14y ago
  There are a couple of good reasons, actually. For one, it improves the morale of the team. Twenty-eight million dollars give a false impression of security to team members. In terms of the market's perception, the perception of company's solidity improves. Don't mind that outside investment is actually a loan (which for me is a risk, and not an asset). The word investment brings in a lot of positive connotations with it. There is also the morale-crunching effect it has on the competition. Everyone else starts to scramble in order to raise money, instead of actually improving their offerings. Its a weird psychological effect mostly found on founders. Investment announcements from competitors make them suffer a lot, and a fair amount simply lose concentration and or quit.
  - cookingrobot 14y ago
    How is stock sale a loan?
  - jacquesm 14y ago
    A series 'B' round is not a loan, and it is definitely not a risk but a huge asset.
    - robryan 14y ago
      It can be a risk, it redefines the kind of exits you can have in future and still be successful. The founders would likely see little now from a $50 mil sale where as that would be a big windfall for a bootstrapped or angel invested only company.
Stratoscope 14y ago
I've been impressed by how many odd cases their website editor handles. When I first started experimenting with Optimizely I got curious and tried loading maps.google.com and replacing one of the map tiles with a picture of my dog. I didn't expect it to work, but it did. So then I made a little torture test page with all the different ways I could think of to insert content into the page dynamically, and they handled them all perfectly. Kudos to the Optimizely team: This is some serious attention to detail.
- elliotykim 14y ago
  Hi there! I'm one of the engineers who worked extensively on the editor, and it warms my heart to hear of your successes! An overarching goal for our team was maximum compatibility with as many sites as possible. Glad it was beneficial to you!
pbiggar 14y ago
Apart from the investment (well done guys!), the revenue figures here are staggering. That is an awesome achievement for what was completely niche when they started a few years back. It used to be that people would refer to VWO when talking about A/B testing. In the last 18 months, every new article has talked about Optimizely. I guess this shows they are completely taking over the market. Looks like awesome execution. This is fantastic guys!
- mva 14y ago
  I was quite astonished when reading about their insane growth. Most of the companies we talk to in The Netherlands (Telco's, E-commerce, Banking / insurance, travel) are using VWO, Sitespect and last week I heard two clients talk about Maxymiser. Not one time I heard them talk about Optimizely. Seems there is still a lot of room for growth (at least in NL). We (usabilla.com) are using Optimizely with great satisfaction though!
  - dsiroker 14y ago
    We're thrilled to have opened our first international office in Amsterdam! We have a phenomenal team of sales and support folks who speak many of the languages out there. Our hope is to delight our European customers as much as we've delighted customers back here in the U.S. Here is a video of the office in Amsterdam: https://vimeo.com/63432751 https://vimeo.com/63432751 Come by and visit!
- paraschopra 14y ago
  Congratulations to the Optimizely team for raising such a huge round. We (Visual Website Optimizer http://visualwebsiteoptimizer.com http://visualwebsiteoptimizer.com) regularly keep getting mentioned in most of the articles that talk about A/B testing. Just as a current comparison, we're growing at a breakneck speed. Here are some stats: * 2400+ paying customers across 75+ countries. We have added 1000+ customers in last 9 months alone * Millions of USD in annual revenue * Serving 10 Billion+ pageviews/month across all our customers All this we have been able to achieve with a team of 17 people right here from Delhi, India and without raising a penny of external funding. We have consciously chose not to raise any VC funding so far as we're very happy with the organic growth we're seeing and the product that we're able to build. Our company vision extends much beyond A/B testing and as an independent company, it is very exciting to see where we can take it. We have a lot of interesting plans for this year. Stay tuned!
adverbs 14y ago
Adverbs. Why adverbs? I'm on the fence about which is more annoying though, "optimizely.com" or a domain like "optimize.ly." Maybe both names are equally irritating...
devicenull 14y ago
Wow! A blog where clicking the logo takes you to the actual website!
Reedge 14y ago
Great accomplishment by Dan & Pete. It really validates the space for a disruptive A/B testing tool at great price-points. Dennis CEO of A/B testing tool http://www.convert.com http://www.convert.com
pixelmonkey 14y ago
I heard through the grapevine that no one wanted to fund Optimizely the first time they pitched for a series A because VCs pigeonholed A/B testing as a crowded space with too small a market. So then, Optimizely went out and executed like crazy, is now making millions per year, and was able to basically define whatever terms they wanted for their fundraising round. This story, if true, would explain why it's such a massive round: it's payback for the annoyance of having to pitch a second time around. Anyway, that's all hearsay. The team deserves nothing but praise -- I hear love for their products regularly from my customers (my startup is next-gen content analytics provider for large sites).
- jacquesm 14y ago
  > it's payback for the annoyance of having to pitch a second time around. I really don't see how you would make 'payback' work. If you can do a better round you should do a better round, payback doesn't enter into it. Everybody involved thought this was a good deal otherwise there would be no deal. You can't get a (sane) investor to pay a premium over and beyond what they feel the company is worth.
ryanbrunner 14y ago
Optimizely is a ridiculously well done product, and it's great to hear they're succeeding. I just started a test today on an app using a huge amount of Backbone, and it's incredible how easy it was to set up.

123 points by jwblackwell 14y ago

Optimizely is a fantastic product; no doubt it creates a lot of value for its customers. That said, it's very difficult for tool vendors (Visual Website Optimizer, Optimizely, Unbounce, etc.) to capture a lot of that value. This deal makes sense in so far as Google, Adobe, etc. will need to buy up all the players in this space so as to beef up their advertising or web tool offerings.

karolisd 14y ago
As Optimizely's CEO is an ex-Googler and Google's current A/B testing tool is crap, I'm just waiting for when Google buys Optimizely. Right now, Optimizely is growing so fast that they haven't reached a place where they'd maximize their price, but I think an acquisition inevitable once their growth plateaus.
netcan 14y ago
Google don't seem to be advertiser friendly in the same way they used to be. Adwords is increasingly becoming a black box where advertisers aren't really encouraged to understand what is going on. In all lot of cases they seem to want to deny advertisers information. I'm not sure what the thinking behind this all is but I suspect one of the biggest reasons is leveraging data without exposing it to advertisers or allowing them to do creepy seeming stuff. That doesn't mean Google won't buy them or won't want to provide these kinds of services. They do provide a crappy product in this category which has very few use-cases these days. Anyway $28m considering the SAAS/SME model should be viable at a range of scales. I wonder if they are planning any big changes that require this kind of cash. Maybe something freemium or a new product that will take a lot of time before it can be profitable. Just speculating.
pbiggar 14y ago
You say that, but the article claims >$10m annual revenues. It sounds like they're having no problem capturing that value.
magikbum 14y ago
Google Ventures is part of this round of investment and prior rounds too.
- rhokstar 14y ago
  ... and awaiting the right moment to acquire!

deleted 14y ago

[deleted]

petenixey 14y ago

Aside from just what a solid company Optimizely is, I think that if you read Dan's blogpost you get a hint at the ultimate direction they may be going. "We firmly believe that 10 years from now people will look back at today and be shocked at how generic, impersonal, and one-to-many what we call the web is... We are striving to become the layer on top of the web that powers that experience." I'd guess that Optimizely may be becoming less about page optimisation and more about experience optimisation. Should my navigation and experience at Tesco be the same as that of a mother of four or a student? My recommendations may be personalised but what if the entire experience at the site including the advertising, design and calls-to action could be personalised and optimised for key customer segments. If you've ever used Test and Target you'll know that it can get pretty complicated but equally that that that sort of segmentation can equally have a huge impact. If Optimizely can pull off a way to easily curate site experiences for different visitor segments and perhaps intertwine those experiences with social then they could have some huge topline impact in those companies.

mvartak 14y ago
yeah, i thought so too! The personalization/recommendation space is super crowded though -- it'll be interesting to see how Optimizely tackles it.
- garagemc2 14y ago
  Quite easily. Take a look at Monetate's website. No transparent pricing. Making it clear what the costs is and making the set up ridiculously easy. Exactly the same strategy as they did with A/B testing.
  - jonahx 14y ago
    It's shocking to me whenever I see company nowadays that makes you contact them for pricing.
    - modoc 14y ago
      It is unfortunately a necessary evil of most enterprise sales situations. My company started out by providing clear, public, easy to understand pricing on our website. We quickly discovered that many large companies expect to get large discounts off of "list" price, and even if your pricing is on par with, or less than your competitors, you end up talking to people who say things like "I won't sign anything if I don't get at least 20% off list price". It's a weird weird world. Companies like Oracle who routinely discount 80+% off of "list" set these expectations in the market.

lucian1900 14y ago

Why do people call things `verb`ly? Does it make more sense to native English speakers than to me? Some even go through the trouble of getting a Libyan domain, which is simply foolish.

lingben 14y ago
I think we'll look back on this and other similar fetishes like .io TLDs and laugh just like we chuckle at the geocities web designs and AOL CDs of yore.
- lucian1900 14y ago
  .io sort of makes sense as I/O, and is from a less unstable territory to boot.
- sudonim 14y ago
  As a .io company... when we bought our domain over a year ago, the only other io I had heard of was http://drop.io http://drop.io (now gone). It has been nuts how many other new companies became .io in the past year.
simonw 14y ago
Because all of the dictionary domain names went a decade ago.
netcan 14y ago
IMO, it's just a formulaic way of naming a company that sends a predictable message. In the 90s, dotcom meant internet startup. 'noun'dotcom told people it's an internet startup to do with noun. verbly or nounify tell people this is a post bust, Web 2.0-ish company to do with noun/verb. 'x'soft, 'y'systems, 'q'solutions... There are lots of ways this is done. Once a convention is established, it's just an easy way of naming a company that projects more or less the right signal and getting on with things.
- lucian1900 14y ago
  I'm saying the word doesn't make sense to me. "Quickly" makes sense. "Jumply" doesn't mean anything. "Bookify" sort of makes sense, vaguely.

netcan 14y ago

Slight tangent: What are the benefits/reasons for a company to be so public about raising investment? Is just a good opportunity for name recognition boosting PR? For some reason, this seems strange https://dl.dropbox.com/u/131615/screenshots/Screen%20shot%202013-04-10%20at%2016.31.27.png https://dl.dropbox.com/u/131615/screenshots/Screen%20shot%20...

jamesjyu 14y ago
One benefit is that if you're going after big businesses and enterprises, they want to make sure your product has longevity. This proves that it's not just a couple guys in a garage with no resources.
orangethirty 14y ago
There are a couple of good reasons, actually. For one, it improves the morale of the team. Twenty-eight million dollars give a false impression of security to team members. In terms of the market's perception, the perception of company's solidity improves. Don't mind that outside investment is actually a loan (which for me is a risk, and not an asset). The word investment brings in a lot of positive connotations with it. There is also the morale-crunching effect it has on the competition. Everyone else starts to scramble in order to raise money, instead of actually improving their offerings. Its a weird psychological effect mostly found on founders. Investment announcements from competitors make them suffer a lot, and a fair amount simply lose concentration and or quit.
- cookingrobot 14y ago
  How is stock sale a loan?
- jacquesm 14y ago
  A series 'B' round is not a loan, and it is definitely not a risk but a huge asset.
  - robryan 14y ago
    It can be a risk, it redefines the kind of exits you can have in future and still be successful. The founders would likely see little now from a $50 mil sale where as that would be a big windfall for a bootstrapped or angel invested only company.

Stratoscope 14y ago

I've been impressed by how many odd cases their website editor handles. When I first started experimenting with Optimizely I got curious and tried loading maps.google.com and replacing one of the map tiles with a picture of my dog. I didn't expect it to work, but it did. So then I made a little torture test page with all the different ways I could think of to insert content into the page dynamically, and they handled them all perfectly. Kudos to the Optimizely team: This is some serious attention to detail.

elliotykim 14y ago
Hi there! I'm one of the engineers who worked extensively on the editor, and it warms my heart to hear of your successes! An overarching goal for our team was maximum compatibility with as many sites as possible. Glad it was beneficial to you!

pbiggar 14y ago

Apart from the investment (well done guys!), the revenue figures here are staggering. That is an awesome achievement for what was completely niche when they started a few years back. It used to be that people would refer to VWO when talking about A/B testing. In the last 18 months, every new article has talked about Optimizely. I guess this shows they are completely taking over the market. Looks like awesome execution. This is fantastic guys!

mva 14y ago
I was quite astonished when reading about their insane growth. Most of the companies we talk to in The Netherlands (Telco's, E-commerce, Banking / insurance, travel) are using VWO, Sitespect and last week I heard two clients talk about Maxymiser. Not one time I heard them talk about Optimizely. Seems there is still a lot of room for growth (at least in NL). We (usabilla.com) are using Optimizely with great satisfaction though!
- dsiroker 14y ago
  We're thrilled to have opened our first international office in Amsterdam! We have a phenomenal team of sales and support folks who speak many of the languages out there. Our hope is to delight our European customers as much as we've delighted customers back here in the U.S. Here is a video of the office in Amsterdam: https://vimeo.com/63432751 https://vimeo.com/63432751 Come by and visit!
paraschopra 14y ago
Congratulations to the Optimizely team for raising such a huge round. We (Visual Website Optimizer http://visualwebsiteoptimizer.com http://visualwebsiteoptimizer.com) regularly keep getting mentioned in most of the articles that talk about A/B testing. Just as a current comparison, we're growing at a breakneck speed. Here are some stats: * 2400+ paying customers across 75+ countries. We have added 1000+ customers in last 9 months alone * Millions of USD in annual revenue * Serving 10 Billion+ pageviews/month across all our customers All this we have been able to achieve with a team of 17 people right here from Delhi, India and without raising a penny of external funding. We have consciously chose not to raise any VC funding so far as we're very happy with the organic growth we're seeing and the product that we're able to build. Our company vision extends much beyond A/B testing and as an independent company, it is very exciting to see where we can take it. We have a lot of interesting plans for this year. Stay tuned!

adverbs 14y ago

Adverbs. Why adverbs? I'm on the fence about which is more annoying though, "optimizely.com" or a domain like "optimize.ly." Maybe both names are equally irritating...

devicenull 14y ago

Wow! A blog where clicking the logo takes you to the actual website!

Reedge 14y ago

Great accomplishment by Dan & Pete. It really validates the space for a disruptive A/B testing tool at great price-points. Dennis CEO of A/B testing tool http://www.convert.com http://www.convert.com

pixelmonkey 14y ago

I heard through the grapevine that no one wanted to fund Optimizely the first time they pitched for a series A because VCs pigeonholed A/B testing as a crowded space with too small a market. So then, Optimizely went out and executed like crazy, is now making millions per year, and was able to basically define whatever terms they wanted for their fundraising round. This story, if true, would explain why it's such a massive round: it's payback for the annoyance of having to pitch a second time around. Anyway, that's all hearsay. The team deserves nothing but praise -- I hear love for their products regularly from my customers (my startup is next-gen content analytics provider for large sites).

jacquesm 14y ago
> it's payback for the annoyance of having to pitch a second time around. I really don't see how you would make 'payback' work. If you can do a better round you should do a better round, payback doesn't enter into it. Everybody involved thought this was a good deal otherwise there would be no deal. You can't get a (sane) investor to pay a premium over and beyond what they feel the company is worth.

ryanbrunner 14y ago

Optimizely is a ridiculously well done product, and it's great to hear they're succeeding. I just started a test today on an app using a huge amount of Backbone, and it's incredible how easy it was to set up.