Funnel, a startup headquartered in Stockholm that sells a SaaS to help companies analyse the effectiveness of online marketing spend across multiple channels, has raised $10 million in Series A funding. London VC Balderton Capital led the round, with participation from existing investors including Industrifonden and Zobito.
The startup says it will use the new capital to develop the Funnel product beyond advertising platforms to work with any type of marketing data, and for further expansion in the U.S. and Europe.
Founded in 2014 by Fredrik Skantze and Per Made, who are also behind Facebook advertising tool Qwaya, Funnel lets marketers automate their online marketing data from multiple platforms in real-time, so that they can more accurately analyse their online marketing spend. That task, Skantze tells me, is often done manually and tallied up into a spreadsheet, a methodology and tool that isn't really up to the job.
"Per and I launched Qwaya in 2012 to target the SME market and open up Facebook advertising to a much larger market of advertisers. Qwaya became a successful business, but the vision was always to go beyond Facebook and build something larger," he says.
"Based on our background in e-commerce and online advertising, and interviews with hundreds of customers, we realised that while there were a lot of tools to help advertisers launch and optimise their ads, almost every marketer we spoke to used a spreadsheet to evaluate the overall effect of their advertising".
This, says Skantze, usually involved a lot of exporting of CSV files from advertising platforms and web analytics tools. Thus, Funnel was created to replace a spreadsheet with software that connects to ad and analytics platforms to automatically stay up to date and allow for more detailed analysis.
"We built Funnel because we could not find a solution to this problem on the market and that has largely played out. We speak to about 300 new prospective customers every month and 90 per cent of the time they use Google Sheets or Excel for this and no other competitor is involved. So it really does feel like there is a new category being formed here around 'your data as a service'," he says.
I'm told that a typical Funnel customer is an e-commerce company that advertises in multiple markets, and that the company counts the likes of Farfetch, Made.com, Daniel Wellington, NA-KD, Footway, and Article as e-commerce customers.
"If you take a marketer at an e-commerce company that uses 12 advertising platforms across 10 markets you are talking about a very complex spreadsheet to evaluate their marketing and someone who hates their life when it comes to manual reporting," explains Skantze.
"As a result it never gets done properly. So the marketer will not really know exactly how things are going and how budgets should optimally be allocated. With $180 billion spent on online advertising every year, that is not ok. CEOs and CMOs are increasingly expecting more from their teams".
Meanwhile, Suranga Chandratillake, a general partner at Balderton Capital, says the London-based VC learned about Funnel because a number of its portfolio companies are using it. "When we dug deeper, we were surprised to find that there were so few alternatives available for marketers," he says, adding that a product like Funnel is especially needed as the number of online marketing channels continues to grow.