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Billion Dollar Unicorns: Clarabridge Wins by Analyzing Customer Sentiment

Posted on Thursday, May 14th 2015

A 2014 report on Customer Experience Management Market by MarketsandMarkets pegs the customer experience market segment to grow from $3.77 billion in 2014 to $8.39 billion in 2019. That translates to an annualized growth rate of over 17% for the five-year period. Here is the story of a leading player in this industry and a Billion Dollar Unicorn Club contender Clarabridge.

Clarabridge’s Offerings

Reston, Virginia-based Clarabridge was founded in 2006 by serial entrepreneur Sid Banerjee. The company was founded with the mission to help organizations better understand the needs of their customers. Prior to founding Clarabridge, Sid had started Claraview, a BI consulting and data analytics company that used Big Data analytics to help organizations understand unstructured data. While evolving Claraview, Sid realized the opportunity for Clarabridge.

Clarabridge’s platform helps enterprises collect, transform, and analyze unstructured data arising from multiple sources including customer interactions, feedback, and even social media. Their platform then analyzes this data to transform it into meaningful results about customer opinions and needs. Organizations are thus able to use this intelligent output to better manage their customer experience.

Their biggest selling feature lies in the high quality of their sentiment analysis. Most companies offer a five-point scale to judge customer sentiment. The five-point scale essentially identifies if the organization’s customers are positive, somewhat positive, neutral, somewhat negative, or negative. But Clarabridge has improved that tremendously as they have taken that sentiment analysis to an 11-point configurable scale that provides businesses the ability to determine the difference between customers who are irritable, upset, and furious and thus take meaningful decisions to address these customers. Furthermore, they do that in nine languages.

Last year, they strengthened their offering with the acquisition of Market Metrix, a leading Enterprise Feedback Management platform that focuses on the leisure and hospitality industries. The terms of the deal were not disclosed. The acquisition of Market Metrix’s results-oriented feedback management platform is expected to successfully complement Clarabridge’s analytics and measurement-focused offerings.

Overall, Clarabridge’s product has received strong acceptance in the market. Their customer list includes Fortune 1000 clients and boasts of names like Best Buy, Dell, E.ON, Intuit, L’Oréal USA, Pella, PetSmart, United Airlines, and The Wendy’s Company.

Clarabridge’s Financials

Clarabridge earns revenues through a subscription-based model for their product and by providing additional services to their customers. They do not disclose their detailed financials, but recent reports have revealed strong growth. The company closed fiscal 2013 with 45% increase in subscription revenues. In 2014, they were ranked 368 on Deloitte’s Technology Fast 500 listing as they had recorded a phenomenal 218% growth during the year.

They have been venture funded so far with $84.3 million in funding received from investors including Yuchun Lee, Summit Partners, and General Catalyst Partners. Their last round of funding was held in 2013 when they raised $80 million from these three investors at an undisclosed valuation. Clarabridge is likely to reach the $100 million annual recurring revenue mark in the next 18 months, and thus, are a strong Billion Dollar Unicorn Club contender.

Recently, I met up with Sid Banerjee again on our 1M/1M Roundtable. You can listen to the recording here.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

This segment is a part in the series : Billion Dollar Unicorns


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