As customer experience becomes even more prominent for businesses in the post-pandemic era, another marketing tech startup has gone public and in doing so has brought its founder to near billionaire status.
Today, New York-based Sprinklr debuted on the New York Stock Exchange under the ticker symbol “CXM”, with initial shares priced at $ 16 per share instead of the initial range of $ 18 to $ 20. The company’s scaled-down IPO raised $ 266 million instead of the original target of $ 380 million. However, when trading ended, the share price rose to $ 17.60 per share.
The idea for Sprinklr came as founder and CEO Ragy Thomas was running the email marketing division of an online DVD sales company in 1999, when email was news. way of communicating at the dawn of the new millennium. This division then morphed into his own business which as CTO he then helped sell for $ 120 million to Epsilon in 2005. A few years later while social media and marketing As social media grew in importance, he realized that there should be a way to help businesses manage their presence on various platforms and founded Sprinklr in 2009.
“It was ‘Aha’ for us at the start,” says Thomas. Forbes. “People talk about pivoting, don’t they? We talk about corporate history and they say ‘Oh, that’s when we pivoted. It’s a business that hasn’t pivoted since day one. With this vision, we have this clarity from day one. It didn’t matter what labels and categories we were given over the past 12 years. We knew we were creating the world’s first unified customer experience.
This original idea came to fruition: Based on the company’s stock price after the markets closed today, Thomas’s stake in the company is estimated at $ 950 million.
While Sprinklr itself is not a household name, its customer list includes many family brands that use it to track what their customers, reviews, and potential customers are saying about them.
From Thomas’ perspective, the transfer of power from brands to consumers illustrates the shift between traditional and modern marketing channels and the need to monitor and respond to the conversation. As a result, he believes customer service and marketing need to work together.
“You can’t beat someone who has complained,” he says.
While some companies have sought to broaden their appeal with new products and services, Sprinklr was built from the start with a “unified platform” that allows the business to manage the customer experience at scale over more. of 30 channels. Thomas says this forced the company to throw away the source code of the dozen companies it acquired along the way to ensure that “architectural purity is sacrosanct.”
The ability to work with unstructured data using AI, which now deals with 50 million businesses and consumers per day in 60 verticals in 50 languages while making 10 billion predictions, is also at heart of Sprinklr’s current discourse.
Since the inception of the company, Sprinklr has raised a total of $ 429 million, according to Crunchbase. In 2015, he raised $ 46 million while crossing the $ 100 million annualized revenue milestone, a 150% increase over 2014. He then achieved unicorn status in 2016 after raising $ 105 million. of dollars. Then last September, Sprinklr hit a valuation of $ 2.7 billion after private equity firm Hellman & Friedman invested $ 200 million in a Series G fundraiser. At the time, Hellman & Friedman Friedman also bought $ 300 million of secondary shares while Sprinklr raised an additional $ 150 million from investment firm Sixth Street Partners in the form of convertible debt during the IPO.
Sprinklr investors say part of the company’s advantage is the consistency of its software architecture, even as it evolves.
“What I like is that it started in 2009 with this vision where most companies start in one part of the customer experience landscape and then over time say they have a more vision. large, ”says Tamir Wasim, partner of Hellman & Friedman. “Ragy is the only founder I have met who started there and said,“ Here are all the building blocks of how to create a customer experience across all channels. “”
Public documents filed with the United States Securities and Exchange Commission reveal that Sprinklr’s revenue increased from $ 324.3 million in fiscal 2020 to $ 386.9 million in fiscal year 2021. However, the company reported net losses of $ 39.1 million in 2020 compared to $ 41.2 million in 2021. (Thomas says the company has had positive cash flow for two years, but the expenses have been part of building the company in the long run.)
Former Cisco CEO John Chambers, who invested in Sprinklr in 2017 when he joined the company’s board, said that while he was still in his old job when he heard about it of Sprinklr for the first time, he might have bought the startup rather than investing in it. Recalling his first meeting with Thomas, the billionaire says “didn’t say hi, but had me at the end of the meeting”, and he says that is when he heard about Sprinklr’s first clients like Nike and Microsoft who conquered it.
“Every acquisition I made at Cisco – and I made 180 – almost all of the major ones were related to one to three customers directly or indirectly saying, ‘You have to take this step,’ he says. . “I’ve always been driven by clients, so I never go wrong between a big vision strategy and with one of the clients,” he says. And when they explained to me that this is a new product, not a category, but a platform game that covers the whole gamut of what they want to do across all interfaces client and they like the business, I go: I understand. This would normally have been the time when I would have bought a business.
As Chambers sees it, the incumbent competitors are “focused on a very structured world, not a multi-channel world.” He also points out that Sprinklr was able to quickly overcome the usual breaking points of some startups when they hit a number of employees.
“If I’m right about what Ragy and the team have done, it has the potential to be an instant repeat when it comes to marketing, advertising, research, care, sales and clearly engagement. “Chambers said. “So when I look at the competition, I like that the first time I saw a graph, it’s everyone, but all are accurate or it’s the former players from 20 years ago. I’ve seen this movie before and should know the outcome if we play our cards right.