Dynamic Yield, which builds Amazon-like personalisation for the rest of us, raises $38M

Amazon, one of the world’s largest companies, has transformed the face of commerce in part because it has managed at once to be “The Everything Store” but still with a route into its sea of products that, for most users, surfaces what they might most want to see (and importantly buy or consume). That kind of personalisation has become a goal not just for e-commerce companies, but for any organization running a digital business: users are constantly distracted, and when their attention is caught, they do not want to spend time figuring out what they most want.

Not every business is Amazon, though, so we are seeing a crop of startups emerging that are working on ways to help the rest of the digital world be just as optimised and personalised as Amazon. Now one of them, an Israeli startup called Dynamic Yield, has raised more money as it continues to expand its business, both to more platforms and to more geographies.

The startup’s Series D has now closed off at $38 million, with the inclusion of a $5 million strategic investment from Naver, Korea’s “Google” (it’s the country’s top search portal) that is also behind messaging apps Line and Snow. The plan is for Naver to help bring Dynamic Yield to Korea and Japan, by incorporating its tech into its own services and those of others that work with Naver.

(Personalisation and aggregators are strong magnets for users in Asia and thus big magnets for funding: ByteDance, which provides news aggregation among other services, was recently valued at $75 billion.)

Naver is not the only search engine that has caught sight of Dynamic Yield over the years. Previous investors include Baidu (“the Google of China”), and we’ve heard that when the startup was younger — it was founded in 2011 — Google had tried to acquire it (Dynamic Yield rejected the offer, and it’s been approached for acquisitions numerous times since then).

Other strategic investors include The New York Times and Deutsche Telekom, alongside other backers like Innovation Endeavors, Bessemer Venture Partners, Marker Capital and more.

Dynamic Yield has raised $85 million to date and is now valued at “hundreds of millions of dollars,” but less than $500 million, a source at the company said, after seeing a strong expansion of its services. 

Dynamic Yield says it works with more than 220 global brands, and its tech reaches 600 million unique users each month, across 10 billion page views and 600 billion “events” on those pages. It claims its AI-based personalisation technology can lift revenues (or other engagement metrics) by 10-15 percent. 

“It makes us an effective tool for surviving in a market where customer acquisition cost keeps getting more expensive,” co-founder and CEO Liad Agmon said in an interview.

Dynamic Yield doesn’t talk about many of its customers on the record — most don’t like to reveal to rivals who they work with, Agmon said.

But they include a number of big brands across e-commerce, travel, finance, media and other segments that use its tech not just to show more targeted products to prospective shoppers, but to help power advertising, recommend content and position the same information to different people in different ways depending on who is viewing it (for example with different headlines).

There are a lot of personalisation and A/B analytics companies in the market today — others include Adobe, Marketo (which is becoming a part of Adobe), Optimizely and many more. Indeed, I’d be very surprised if Amazon is not working on ways of productising its own personalisation tech in a way that is not intrinsically linked to its own marketplace (because some will never want to sell there, and because personalisation can be used for so much more than just e-commerce).

Dynamic Yield, however, claims that it has an edge over these because of how it works.

Agmon says that the tech sits on top of whichever CMS or other backend server that a site is using and is activated by way of a small amount of code. It uses machine learning to both “read” what is in a site, and matches that up against specific visitors and its own trove of experience.

Agmon added that when a business already has information about that visitor, that is the primary data that is used; otherwise it also incorporates other data sources like Acxiom and others — much the way that other marketing tech does — to form a stronger picture of your tastes.

It then runs this data through its own machine learning algorithms both to recommend content and to help a marketing manager figure out better customer segmentation overall. There is an “autopilot” version of the product where everything is automated based on Dynamic Yield’s algorithms; or options to use the data sources to set up specific marketing campaigns; or (as is common) a combination of the two.

Going forward, Agmon said the plan is to work across an increasing number of interfaces where customers are going today to discover and buy goods and services. Indeed, we’ve described how some of the newest e-commerce startups have eschewed any website or app of their own and work exclusively in third-party messaging apps to acquire customers and sell goods.

But it’s not just these new digital platforms that are becoming targets for personalisation startups like Dynamic Yield.

Agmon said that his company is also working with a major retailer that is using its tech at its in-person payment points. When — for example — a customer comes to order a latte, instead of generic upselling to the latest seasonal flavour, the person taking the order will now know if the customer ever orders a sweet injection, or if she/he is more of a savoury snack sort of person. The cashier will then know what to recommend to eat with that drink that is more likely to be purchased.

The mom-and-pop shop with its reputation for knowing the regulars and what they like might have found its dystopian (but useful) heir.