Rokt, a leading e-commerce technology platform, which uses AI and machine learning to make transactions more relevant to individual shoppers, said today that it has completed a $325 million Series E funding round led by Tiger Global, bringing the company’s valuation $1.95 billion.
The tech unicorn will use the new capital to invest in R&D, international expansion and strategic acquisitions. Other participants in the round included Wellington Management, Whale Rock Capital Management, Pavilion Capital and existing shareholder Square Peg.
“We’re thrilled to partner with Tiger Global and the rest of this prestigious group of investors to accelerate our product development and global expansion efforts and enable more partners to boost their profitability, connect brands to new customers, and deepen engagement and loyalty,” said Bruce Buchanan, Rokt CEO.
“Our focus is on creating a platform that can double the economics of any e-commerce transaction and in doing so, enable our clients to do things that were otherwise not feasible,” Buchanan told me. “How our clients deploy the technology keeps expanding. We’re now starting to do more work in payments and insurance for example, but our R&D focus remains on making the e-commerce transaction experience relevant for every customer.”
The company invests more than 50 cents of every dollar of expenditure on long-term R&D to continue to solve the relevancy problem in the connected world of e-commerce, the company said.
Rokt cuts through the cacophony of superfluous messages bombarding consumers when they are on the verge of making a payment at point of sale. It’s the moment when many shoppers bail, abandoning baskets and leaving with a negative impression of a retailer’s shopping experience.
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“Customers are demanding a more relevant e-commerce experience and businesses need to ensure they have the right economics to be able to grow,” said Buchanan. “Our technology solves these two problems by optimizing every element of the transaction moment, both for relevancy and value for each individual customer, enabling digital businesses to remove irrelevant clutter and double their profitability.
Through its proprietary technology, Rokt enables e-commerce clients such as Live Nation, Staples, Lands’ End
Online shoppers are twice as likely to engage with relevant products, services and marketing messages at the transaction moment of their purchase journey, Buchanan said. The company’s solution leverages AI and machine learning to optimize every customer action to deliver more value.
“Rokt has unlocked a new digital advertising opportunity for the online ecosystem – the transaction moment, and they are scratching the surface of what is possible in this moment,” said Griffin Schroeder, Partner at Tiger Global. “Rokt’s exceptional management team has the vision and the capability to continue accelerating growth and providing unique solutions for their clients.”
When Buchanan was developing Rokt, he didn’t want to build it around advertising problems, so he decided to rethink the way advertising should work in a commerce transaction. Rokt leveraged both contextual and transactional information. The engagement rate is about 50 times higher and results in higher revenue for partners, he said.
Rokt is now in 19 markets, and will continue to expand into more. At the moment, we’re focussing our international investment into expanding our teams on the ground in the Asia-Pacific region, including Japan, and our London office servicing Europe, the Middle East and Africa,” Buchanan said. “We see huge growth ahead in 2022 and beyond for these regions. We also see a lot of opportunities in Canada and South America.”
Recently enacted restrictions on digital ad tracking have reduced the return-on-investment online businesses achieve by advertising on search platforms and social media sites, prompting brands to reallocate marketing funds to new solutions such as Rokt’s. E-commerce brands that partner with Rokt are able to use their own first-party data to deliver more relevant and personalized messages and offers.
As it has with previous funding rounds, Rokt, its Series E round, is rewarding its employees and current investors for their hard work and support by providing them with a liquidity opportunity.