By Amy Feldman
A few months ago, Amplitude, a San Francisco-based company that helps companies build better products through advanced analytics, made the cut for Forbes’ 2018 list of Next Billion-Dollar Startups.Now it’s one step closer: The startup raised $80 million in a new round of venture funding led by Sequoia Capital at a valuation of $850 million.
With the new funding, Spenser Skates, the company’s 30-year-old CEO and an alumnus of the Forbes 30 Under 30 list, plans to expand internationally, with new offices in the works in London, Paris and Singapore, and to continue to add functionality to its software. “Our goal is to be what Salesforce was for sales and Adobe was for marketing for the product world,” he said.
Amplitude’s software helps companies identify features that make customers happier and find problems that could stall a business. For Peloton, for example, Amplitude relied on data to help create a virtual community on their in-home bikes to keep people interacting with the product. And for Intuit, it helped identify a reason so many users of a new product for self-employed people never sent invoices was its poor interface with Gmail — allowing Intuit to create a plug-in to make invoicing easier for Gmail users and gain rapid adoption. In both cases, Amplitude parsed the data to try and understand what was going on below the surface. “It’s one thing to say, ‘Of course people behave this way,’ but it is really unexpected in practice,” he said.
Pat Grady, the Sequoia partner who led the investment, said that he had been tracking Skates and his cofounders for several years. “A couple of portfolio companies have whispered in our ear, ‘Hey this is a really cool product,'” he said. “There are a lot of tools that do similar things. The reason that we’ve invested in Amplitude now is that it’s starting to become abundantly clear that they’re risen above that pack.”
The theory underlying the investment, he said, is similar to that for Sequoia’s earlier investments in customer-experience software companies Qualtrics, which recently agreed to be acquired by SAP for $8 billion, and Medallia, which is expected to go public in 2019.
For now, Amplitude is far earlier stage than either of those two companies. Its revenue is on track to reach $45 million this year, and Skates expects to expand aggressively next year, perhaps doubling the size of the company, with help from the new funding. In addition to Sequoia, investors in the latest financing include Lead Edge Capital, Battery Ventures, Benchmark Capital and IVP.
Skates and cofounder Curtis Liu are among an increasing number of Forbes 30 Under 30 alums whose companies have later landed on the Forbes Next Billion-Dollar Startups list. Others include Away’s Steph Korey and Jen Rubio (profiled in Forbes magazine last month) and Pillpack’s TJ Parker (who sold his company to Amazon for $1 billion earlier this year). For Skates, 2018 was an especially momentous year. “I turned 30, we raised a Series D and I got engaged this year,” he said. “That’s going to be hard to top.”