Dan Roy, a former software engineer at Delta, says he’s seen firsthand the challenges companies face as they transition from an on-premises model to a software-as-a-service business. Accucast, where he was CTO after leaving Delta, struggled when it offered email marketing software and services. The solution, he came to believe, was a hybrid approach — one that accesses brands’ proprietary data directly, rather than relying on cloud-based data syncs.
Roy founded MessageGears in 2011 with Taylor Jones, a colleague, to realize this solution. The company’s platform uses data where it is in the format it’s already in to provide businesses with a suite of cloud-based marketing tools.
“This approach was embraced by early adopters like Expedia and Rakuten, but really started to gain popularity as more brands started moving first-party data to more modern cloud data warehouses like BigQuery, Redshift and Snowflake,” CEO Roger Barnette told australiabusinessblog.com in an email interview. (In computing, a “data warehouse” is a system used for reporting and data analysis.) “The ‘old way’ of copying and synchronizing data between systems diluted the benefits of those solutions for big brands.”
MessageGears, which announced today that it has raised $62 million in a funding round led by Long Ridge Equity Partners, offers features such as customer segmentation and personalization of marketing messages. The platform can orchestrate the delivery of messages through various channels (think email and SMS), using data stored in existing data warehouses.
According to Barnette, the goal is to improve overall customer engagement by personalizing brand experiences. It’s easier said than done. A recent report released by London Research and BlueVenn found that only 29% of customer-facing companies globally felt they had created a seamless experience across all of their digital assets. A separate poll by Omdia marked data visibility issues; 55% of respondents said silos get in the way of a holistic view of their customer experience data.
“While the primary users of MessageGears marketing teams, marketing operations and data teams are usually heavyweight champions during the procurement process,” said Barnette. “Technical teams can help marketing deliver world-class campaigns without sacrificing data security. giving the flexibility to build audiences and campaigns using live data.”
Businesses can be wary of passing customer data through a third-party service like MessageGears, especially in light of the global rise in case of data breaches. Barnette insisted brands don’t have to copy sensitive data into a separate silo, claiming that MessageGears only decrypts customer records to run campaigns and to “suppress sensitive data” from the platform’s visual dashboards.
“All campaign filtering and segmentation is done within the customer’s data environment. Only data needed to personalize a message is passed to our cloud environment,” adds Barnette. “All personally identifiable information (PII) is encrypted, both in transit and at rest. In addition, all PII and campaign data is redacted immediately upon delivery.”
MessageGears competes with customer engagement software vendors, including Batch, which raised $23 million last year to expand its customer segmentation and messaging services. It has another rival in MoEngage, which secured a $30 million investment last December for its multi-channel analytics and campaign organizing tools. Not to mention Iterable, Cordial, Oracle Responsys, Adobe Campaign, Emarsys, and Zeta Global.
However, it’s safe to say that MessageGears has a foothold in the market, with a customer base of over 50 companies, including Expedia, T-Mobile, Rakuten, and Chick-fil-A. Barnette did not answer a question about MessageGears’ revenue and usage rate, saying the startup has no plans to expand its 102-person workforce by the end of the year. But he claimed the startup is positioned for growth.
“With the economic headwind, technology companies in particular are cutting back on their workforce and slamming shutters, halting innovation,” said Barnette. “The pandemic accelerated growth for MessageGears as retailers and other consumer brands accelerated and prioritized digital transformations and appeared to become more efficient while standing out to their customers with relevant, personalized offers… MessageGears benefits corporate brands in three ways: cost savings, efficiency gains and [d]more personalization.”
Argentum Group and Atlanta Ventures also participated in MessageGears’ latest round of growth, bringing the start-up’s total funding to just over $80 million. As part of the fundraising effort, Angad Singh of Long Ridge joined the MessageGears Board of Directors.