MessageGears, a cloud customer engagement platform, raises $62M

Dan Roy, a former software engineer at Delta, says he witnessed firsthand the challenges companies face when making the shift from an on-premises model to a software-as-a-service business. Accucast, where he served as CTO after leaving Delta, struggled with this as it pitched software and services for email marketing. The solution, he came to believe, was a hybrid approach — one that directly accesses brands’ first-party data instead of relying on cloud data syncs.

Roy founded MessageGears in 2011 with Taylor Jones, a colleague, to productize this solution. The company’s platform uses data where it lives in the format it’s already in to give companies a suite of marketing tools in the cloud.

“This approach was embraced by early adopters such as Expedia and Rakuten but really started to gain traction as more brands started moving first-party data to more modern cloud data warehouses such as BigQuery, Redshift and Snowflake,” CEO Roger Barnette told TechCrunch in an email interview. (In computing, a “data warehouse” is a system used for reporting and data analysis.) “The ‘old way’ of copying and syncing data between systems diluted the benefits of those solutions for big brands.”

MessageGears, which today announced that it raised $62 million in a funding round led by Long Ridge Equity Partners, offers features including customer segmentation and marketing message personalization. The platform can orchestrate the delivery of messages across different channels (think email and text), drawing on 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, globally, only 29% of client-facing companies felt they’d established a seamless experience across their digital properties. A separate poll by Omdia highlighted issues with data visibility; 55% of respondents said that silos prevent a holistic view of their customer experience data.

“While the primary users of MessageGears are marketing teams, marketing operations and data teams are usually heavy champions throughout the procurement process,” Barnette said. “Technical teams can help marketing deliver world-class campaigns without sacrificing data security. They don’t have to worry about syncing or lag time and can empower marketers with the flexibility to build audiences and campaigns using live data.”

Companies might be wary of having customer data passed through a third-party service like MessageGears, particularly in light of the global rise in data breaches. Barnette insisted that brands don’t have to copy any sensitive data to a separate silo, though, claiming that MessageGears only decrypts customer records for the purpose of fulfilling campaigns and to “suppress sensitive data” from the platform’s visual dashboards.

“All campaign filtering and segmentation executes within the customer’s data environment. Only data required to personalize a message is passed to our cloud environment,” Barnette added. “All personally identifiable information (PII) is encrypted both during transmission and at rest. Additionally, all PII and campaign data is redacted immediately following delivery.”

MessageGears competes with customer engagement software vendors including Batch, which last year raised $23 million to expand its services for customer segmentation and messaging. It has another rival in MoEngage, which landed a $30 million investment this past December for its multi-channel analytics and campaign-organizing tools. That’s not to mention Iterable, Cordial, Oracle Responsys, Adobe Campaign, Emarsys and Zeta Global.

It’s safe to say MessageGears has a foothold in the market, though, with an over-50-company customer base that includes Expedia, T-Mobile, Rakuten and Chick-fil-A. Barnette didn’t answer a question about MessageGears’ revenue and burn rate, and said that the startup doesn’t have plans to grow its 102-person workforce by the end of the year. But he asserted that the startup is positioned for growth.

“With the economic headwinds, tech companies especially are reducing their headcount and battening down the hatches, which will idle innovation,” Barnette said. “The pandemic accelerated growth for MessageGears as retailers and other consumer brands sped up and prioritized digital transformations and looked to become more efficient while standing out to their customers with relevant, personalized offers … MessageGears benefits enterprise brands in three ways: cost savings, efficiency gains, and [d]eeper personalization.”

Argentum Group and Atlanta Ventures also participated in MessageGears’ latest growth round, which brought the startup’s total raised to just over $80 million. As a part of the fundraising, Long Ridge’s Angad Singh joined MessageGears’ board of directors.

MessageGears, a cloud customer engagement platform, raises $62M by Kyle Wiggers originally published on TechCrunch