In the past decade, companies like Segment revolutionized how businesses leveraged APIs to integrate data from various applications for enhanced marketing strategies. Presently, a startup named Hightouch, co-founded by a former Segment engineering manager, has announced it has secured $80 million in funding for its next phase: a platform enabling sales, marketing, and customer service teams to synchronize data from warehouses and other sources, complemented by AI agents that optimize these processes and user experiences.
Sapphire Ventures leads this Series C funding round, with contributions from NVC, Amplify Ventures, ICONIQ Growth, Bain Capital Ventures, and Y Combinator. This funding round elevates Hightouch to a post-money valuation of $1.2 billion, effectively doubling its valuation since its last funding round in 2023.
The fresh capital will be allocated towards enhancing Hightouch’s technology, facilitating business development, and expanding the hiring process.
Tejas Manohar, co-CEO of Hightouch, who launched the company alongside Kashish Gupta (co-CEO) and Josh Curl (CTO), noted that during their time at Segment, where both he and Curl collaborated, they recognized that there was much more to do beyond simply creating an API integration for enhanced data connectivity. This was an important leap, but it was often too technical given the variety of data sources typically employed by organizations.
“Getting customers to load data into Segment was a cumbersome challenge,” Manohar reflected, particularly since data from warehouses—which often served analytical purposes—was not primarily intended for marketing.
In 2019, as Segment grew (culminating in a $3.2 billion acquisition by Twilio), Manohar and Curl partnered with Gupta, a specialist in machine learning, to embark on their own venture and establish Hightouch.
Hightouch has centered its development efforts on two primary product areas.
The first is its core customer data platform (CDP) product, which caters to both technical users and data scientists. Launched in 2020, Hightouch’s CDP was innovative in its pivot from focusing solely on app-based data to employing machine learning and other tools for leveraging data from warehouses in marketing, sales, and customer support contexts.
“They recognized that cloud data warehouses are the new customer data platforms,” noted Rajeev Dham, a partner at Sapphire Ventures, who will join the board following this funding round.
Applications for this technology include crafting personalized campaigns, creating loyalty programs, and syncing warehouse data with an extensive array of tools (more than 250, according to the company, including major CRM and marketing platforms). Users can draft SQL queries to transfer data from warehouses to various applications for targeted purposes, accompanied by a user-friendly graphical interface for those not versed in technical jargon.
The second product from Hightouch is a newer offering called AI Decisioning, which delves deeper into the realms of machine learning and automation, effectively providing what its name suggests: an AI-driven solution that can be directed toward specific goals, conducting numerous tests and experiments to propose the most effective campaigns.
AI Decisioning has been available since August 2024. While Hightouch had been operating without an immediate need for additional financing—being described as “capital efficient” with existing funds—growing customer interest in the AI offering prompted the decision to pursue this Series C funding.
“This motivated us to say, ‘Okay, let’s initiate this conversation and raise this round,’” Gupta stated, “because we finally have a legitimate application for this capital.”
Manohar acknowledged that the strong uptake of the AI product was boosted by its rollout to existing clients, which includes notable companies like Spotify, PetSmart, Tripadvisor, and Grammarly. Yet, amid today’s booming AI landscape, Hightouch has also attracted new business as a result of AI Decisioning.
While the primary attraction for adopting AI has traditionally been to “do things faster,” as Manohar describes, the motivations are evolving.
“Leaders at the levels of CEO, Chief Digital Officer, and Chief Marketing Officer are increasingly focused on how we can leverage AI to enhance customer experiences and boost revenue and lifetime value across our customer base,” he asserted. The AI Decisioning agents can “execute thousands of experiments to identify the optimal user experience,” added Manohar.
Hightouch’s previous funding efforts include a seed round in 2020 from Y Combinator and others, a $40 million round led by ICONIQ Growth, and a $38 million round conducted in 2023.
Compiled by Techarena.au.
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