Mixpanel, which describes itself as offering “the most advanced analytics platform ever,” is announcing that it has raised $65 million in new funding.
That round comes entire from all from previous investor Andreessen Horowitz, and co-founder/CEO Suhail Doshi told me that it values Mixpanel at $865 million (the valuation includes the new cash).
Mixpanel was incubated by Y Combinator and launched in 2009. As Doshi (he’s the middle guy on someone else’s shoulders in the team photo above) tells it, a year later the team decided to make “a big bet” by focusing primarily on mobile, turning it into “king of the mobile analytics enterprise mountaintop.” (That might sound like startup hyperbole, but Mixpanel is usually the first name that comes up when I talk to people about this market.)
The company says it analyzes 34 billion actions every month. That’s a bit of an abstract number, but more concretely, Doshi said Mixpanel has been profitable since 2012. That’s why, even before the new round, the company supposedly had more than $20 million in the bank. (It previously raised $12 million in venture funding.)
The additional funding will help Mixpanel become more ambitious and experimental, Doshi said: “I want to double down on risk, I want to double down on ambition, I want to double down on our product.” For one thing, he wants to invest in making the platform better at making predictions for the future, which he described as “combining data science with AI.” He also plans to do more to make Mixpanel data usable by non-data scientists.
Doshi recalled warning investors that as Mixpanel moves into new areas, “We’re going to do things that are going to fail and you have to be okay with it.”
To illustrate how the company has experimented and failed in the past, he pointed to the visualization tool Flow, which was quietly shut down after six months. However, Doshi said the experience signaled the difficulties in launching a product that’s too isolated from the core Mixpanel platform, a lesson he incorporated into the successful launch of Mixpanel’s subsequent product focused on user data. (That product now accounts for 20 percent of the company’s revenue.)
I’d also heard that Mixpanel had some trouble keeping customers around for more than a year, so I asked Doshi about it in a follow-up email. He told me:
We measure ourselves very harshly on customer retention. For the past 5 years we’ve offered month to month subscriptions and work with a ton startups. That segment will have the highest churn naturally. As we get larger and get more annual subs, work with larger customers, and build out a larger customer success team we will see that churn rate go down. You have to be ok with a higher rate of churn when you’re trying to dominate a market and you go bottom up instead top down. We have a ton of customers who have been with us for over a year: big and small.
As for why he didn’t bring on additional or new investors, Doshi sang Andreessen Horowitz’s praises, telling me that the firm “believed in us at a time when other people were passing on us.” And yes there’s a lot of PR and marketing around the firm, but he said in this case, “A lot of it is true.”
Featured Image: Mixpanel
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