
Optimizely Raises $28 Million to Go Global - jwblackwell
http://blog.optimizely.com/2013/04/10/optimizely-raises-28-million-to-go-global/
======
petenixey
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.

~~~
marbemac
Right, it looks like they're going to build something similar to Monetate
<http://monetate.com/products/personalization>. There are already high
quality, established players in this space. I'm curious to see how they'll
differentiate themselves.

~~~
pg
Did you notice the graph in that post? I think you mean to say "I'm curious
how they've been differentiating themselves."

~~~
jacquesm
Without size cohorts that graph doesn't mean much. I'm sure that if you'd have
those it would be very impressive but just by itself that graph is not
interesting other than to show very good growth and very good future
prospects. It's the kind of slope investors like to see :)

If optimizely is as well represented in the top 100 and top 1K as it is in the
top 10K then that would be a much stronger statement.

~~~
dsiroker
Hi Jacques, we have pulled together the same data in terms of adoption for the
top 100k and top million and they look very similar.

A great source for this data if you are looking to dive into it is
<http://trends.builtwith.com/analytics/Optimizely>

~~~
jacquesm
Would it be a lot of work to get that data for top100 and top1000?

If it holds there too that would be absolutely awesome.

~~~
jcampbell1
I am not sure how that would make sense. VWO has Microsoft and Groupon, but I
am sure it is a tiny portion of their total traffic. What are you really
measuring?

The thing is we are talking about .5%-3% share here, and the top 100 would be
statistically meaningless. What you really want is revenue, and I am sure that
is private information.

VWO advertises about 2500 customers and Optimizely claims 4000.

Frankly, I'd be more interested in how the Google numbers were calculated. It
is now so integrated with Google Analytics it is pretty hard to detect.

If I were a betting man, I'd guess their revenue run rate is around $10M.

~~~
jacquesm
Selling into the top 100 would be statistically meaningless but it would be
extremely important to optimizely to show their adoption. If F500 companies
rely on your service that is an excellent arrow in the quiver of your sales
staff to pull smaller companies over the dotted line.

If the representation in the top 100 and top 1,000 would be percentage wise
just as high as in the top 10,000 then I believe that would be an extremely
powerful tool in optimizely's sales arsenal.

Selling to 'the establishment' serves as a very strong validation, especially
because there may be a ceiling at which it is easier/better to roll your own
A/B testing. If optimizely can prove that there is no such ceiling (that for
instance, even Amazon would be better off to use optimizely than to roll their
own) you can expect their value to skyrocket.

~~~
jcampbell1
I see your point, but they already provide their top customer list:

<https://www.optimizely.com/customers>

also see VWO:

<http://visualwebsiteoptimizer.com/customers.php>

You are asking for data that is publicly available.

------
pbiggar
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!

~~~
paraschopra
Congratulations to the Optimizely team for raising such a huge round. We
(Visual Website Optimizer <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!

~~~
robryan
Congratulations, always been interesting to follow the VWO progress. Given A/B
testing would benefit a massive amount more companies than the numbers of
customers quoted here for both companies I am sure there is plenty of room for
multiple players in this market.

------
pixelmonkey
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
> 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.

------
lucian1900
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
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.

~~~
sudonim
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> (now gone). It has been nuts how many
other new companies became .io in the past year.

------
Stratoscope
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
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!

------
josephby
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.

~~~
magikbum
Google Ventures is part of this round of investment and prior rounds too.

~~~
rhokstar
... and awaiting the right moment to acquire!

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

------
netcan
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%20...](https://dl.dropbox.com/u/131615/screenshots/Screen%20shot%202013-04-10%20at%2016.31.27.png)

~~~
orangethirty
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.

~~~
jacquesm
A series 'B' round is not a loan, and it is definitely not a risk but a _huge_
asset.

~~~
robryan
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.

~~~
jacquesm
You trade one risk for another, and you are ignoring that post money
optimizely has $28M in the bank so it's balance sheet is simply $28M fatter
than it was pre-money.

A buyer would simply be buying cash and would have no problem with paying
$78M.

If optimizely now spends this $78M in a way that does not contribute to the
balance sheet (superbowl ads, whatever) _then_ they have limited their future
options.

------
Reedge
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>

------
ryanbrunner
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.

