Persado, a new data-driven marketing software company spun out from Upstream Systems, raised $15 million in funding led by Bain Capital Ventures, the company announced this week.
Founded by CEO Alex Vratskides, Persado developed and sells “marketing persuasion technology,” which uses data and software to determine the most effective marketing messages for multi-channel digital marketing strategies.
“We live in a world where digital marketing is completely pervasive and all of this marketing uses language to try to persuade you as a consumer to do something,” Ethan Stock, SVP of business development and marketing for Persado, told AdExchanger. “The problem is that it’s difficult to come up with the language that works really well for all of these different ad channels. We came up with algorithmic methods to solve that problem.”
Persado started out as a division of Upstream Systems, a mobile marketing company that Vratskides also founded. Clients at Upstream were looking to improve the effectiveness of their mobile marketing messages and communicating in shorter messages. Clients of the new Persado include Skype, TIM Brail mobile operator, and social network Badoo.
Persado hopes to expand more into financial services and web services, working with companies with freemium models like Skype to help upsell their customers. There aren’t many companies in the space using algorithmic methods to solve this problem, Stock said. Companies that do so, such as BoostCTR, use more manual methods, including turning to groups of copywriters or panels of consumers, while other data-driven marketing technology firms such as BloomReach focus more on SEM and SEO, rather than digital marketing messages.
Looking specifically at display ads, Stock said, Persado’s technology can help with ad copy. It does not offer real-time technology to modify copy, but Persado can work with real-time technologies to enhance effectiveness.
Vratskides said, “The challenge that we have is practical execution and understanding how different verticals work. It comes down to relating to the core KPIs and the core challenges of the CMO for those verticals. Execution, right now, is our challenge.”
Vratskides decided to spin out Persado as its own company with a SaaS business model at the end of 2012, when it received $15 million in Series A funding led by Bain Capital Ventures. The company plans to double its spend on R&D, expand its sales and account management functions, and grow in the U.S., where it will open two offices in San Francisco and New York. Currently, Persado has about 65 employees, with plans to double that as well.
“When we came upon Persado, one thing that really excited us was the immense amount of data that this company has built up and the information service, and the analytics and data science capabilities all wrapped into one, which enables an algorithmic or machine-based approach to semantic and message automation,” said Deepak Sindwani, partner at Bain Capital Ventures. “We see that as a big problem and with Persado, you have a horizontal platform that is relevant to multiple verticals."