Data analysis is nothing new. For decades digital companies have collected tons of data, like how many people visit a certain page, how many of them don't finish their order when they're shopping, how many are leaving their cart full, how many people leave the page and after how many minutes.
So far, however, the tools for analysis only give an answer to the question "How much?". Bulgarian company SessionStack, founded by Alexander Zlatkov, is looking to answer the much more important question "Why?".
"We want to make the next step in data analysis - not only give you numbers on what is happening, but to give you the answer why these things are happening. Not just "you have five new clients", but how they became new clients", says Zlatkov, a former employee of software company Telerik at the end of 2016. SessionStack is developing tools for deep analysis of data that give specific recommendations for a certain organization to achieve better results. The business model is Software-as-a-Service, i.e. subscriptions.
SessionStack closed its first serious round of financing in the amount of 750 thousand euro, of which 700 thousand from VC fund BrightCap, and 50 thousand euro from Telerik co-founder Boyko Yaramov. Zlatkov says that before the investment he had three offers to sell the company - one of them from a site-making firm and one from an equity fund.
From their own experience
SessionStack was founded in 2016 and was a self-financed enterprise at first. "The company got off because of my own pains. As a programmer I had many times wondered why the user has a problem with our product. It was very strange, because we couldn't understand our own cilents," says Zlatkov. This was the first version of the product and it was aimed at software developers. Currently, it is aimed at product managers.
At the very beginning of its existence SessionStack entered the Estonian accelerator program Startup Wise Guys. Minority shareholders are Boyko Yaramov and Hristo Kossev from Telerik, along with Pierre Vallet from Proxiad and Vassil Popovski from Leanplum.
"At the beginning we were focused on technical problems, developers' problems. We financed it, because we had some saved money. We had strict timetables for our first version, for the validation and when we got to the accelerator program, we already had three clients: one Bulgarian firm, one Israeli firm and one American firm," says Zlatkov.
Today SessionStack can point to some pretty big clients like software company Sprinklr, Motorola, Time Inc. and even the Texas state government.
"So far all our clients have come to us organically. Some publications on our blog became very popular, particularly because there is no other solution that has won the market yet," Zlatkov said, adding this doesn't mean there is no competition. According to him, there are several other companies that address the problem in a similar way but all of them are startups and the niche is still without a dominant player.
"With this round of financing we want to become leaders in Europe. Right now, 60% of our clients are from the US and now we want to step into Europe, because there is no strong player here. That doesn't mean we are going to ignore North America."
Two years later, an investment
The first conversations between SessionStack and BrightCap about an investment date back two years ago, when the company declined to raise additional capital. "Back then the product was different - more like analysing the user session to help the developers. We liked that a lot, because the investors in the fund have a background as developers," says George Mitov, managing partner at BrightCap. "A few weeks ago they came to us with the news that they now have an open round. It was easy for us to take the decision to lead it."
Alexander Zlatkov says that the round has a few goals: first, the product must be developed. "We still have ways to go developing the product and adding things to it, so that we can give the best advices to product managers. We have spoken to many of them and their main problem is that they have data from many places, but have no idea what to do with it. Our goal is to give them recommendations that make them as efficient as possible."
As an addition to this goal SessionStack plans to work on putting the product on different platforms. So far the tool works in web environment, while in the furutre it should also work in mobile. There is also focus on data security - the product can be integrated in organizations that use cloud solutions like AWS or Google Cloud, but also within organizations with their own servers. Sensitive data does not leave users' browsers, which is one of the reasons why a pension fund and healthcare companies use SessionStack.
The second big goal is for the company to open its first office in Western Europe in the next 12 months. The team is discussing where exactly, with the options being Germany, the Netherlands and the UK. There will be also a separate legal entity which will help with investment in the future.
In the long term, Zlatkov plans to look for a larger round, with a view on the consolidation in the sector that he thinks is going to take place after a few years. "We want to be ready for a big Series A round from a good Western VC that will be focused entirely on a more serious expansion," he says.
"Our market is very big and developing very fast, which is the most important thing. There are different players going into the market, looking through different prisms. I believe that the future is to have different apps and companies consolidating in the next five or six years, and we want to be in the best position possible," concludes Zlatkov.