I have been playing with the idea of writing a blog for quite some time, but as writing doesn’t come naturally to me, I needed a good reason, and I believe announcing our investment in Dynamic Yield is a really good one.
I have known Dynamic Yield since its inception. Dynamic Yield literally started in a room next to mine at the Bessemer office where Liad, Omri and their team spent the first year building their MVP. I participated in both the Seed and A rounds of the company, and also served as an observer on the board. Fast forward 2 years, I am happy to have the opportunity to lead the latest round on behalf of Vertex.
So why did we invest in Dynamic Yield?
As you would expect, the first reason is definitely the team. Working closely with the company during its early days allowed me to get to know Liad (CEO) and Omri (CTO) intimately. Both are exceptional individuals that complement each other well. Liad is a visionary and charismatic, and while he comes from deep tech and product backgrounds, he has grown to be a phenomenal business person. Omri is the tech co-founder every company wished it had. He has built a strong, 30-person tech team and technology stack which is one of Dynamic Yield’s competitive advantages. He also brings a rare, quiet leadership style, which helped create Dynamic Yield’s unique culture and DNA. Over the years, Liad and Omri have built a strong and diverse management team that is capable of scaling the business further. Another noticeable part of the team, which is rarely discussed, is the investor base and board. With BVP’s Adam Fisher (from whom I hope I learnt at least a little about venture investing during the great 4 years working with him), Marker’s Rick Scanlon, who is strategically based in NYC near Liad, and Access Industries’ Daniel Shinar (who brings invaluable experience working with global E-Commerce companies), Dynamic Yield and Liad get valuable expertise and support.
The second is the market opportunity. Most great companies ride on clear and strong technology (or business) trends, and there are two major ones in Dynamic Yield’s case: Personalization and AI. The first wave of personalization in E-Commerce included mostly point solutions, targeting very specific and narrow user experiences and use cases. Email, cart abandonment and product recommendation to name a few. However, as marketers are now expected to manage multiple channels (email, app, web, etc.) across the user funnel, there is a need for an end-to-end platform that would allow them to easily, quickly and cheaply launch cross channel campaigns and products. Recent developments in machine learning and AI further amplify the opportunity as companies collect huge amounts of user data, that can be used to significantly improve targeting capabilities. E-Commerce represents a big opportunity by itself, however, other verticals, like B2C and online brokers, go through similar trends (with some delays), so opportunity for Dynamic Yield is massive, and we expect multiple winners to emerge in this space in the coming years.
That leads us to Dynamic Yield’s product offering. Dynamic Yield is the first to bring a truly comprehensive platform to the market. The platform includes several technology layers: a best of breed data platform that can mesh huge amounts of data in real-time from every source available, from CRM data to 3rd party sources. A set of sophisticated machine learning algorithms for dynamic segmentation and behavioral predictions to help optimize across the user experience and engagement in real time, and advanced serving capabilities, or the ability to modify both layout and content as appears on the web, mobile, and on any other communication channel. All these come in an easy to use package, with a wide range of enterprise-grade management and reporting capabilities. There’s nothing like a customer testimonial to show the value of the product — Lamoda realized $11M uplift with Dynamic Yield.
The last piece of the puzzle is the traction and business status. With nearly 100 customers that include global brands like Under Armour, Sephora, Liverpool FC, Lamoda, FoodPanda and many others, Dynamic Yield has shown not only product-market fit, but also its ability to win and deliver large enterprise deals with demanding customers. With the growing pipeline, we are optimistic about the coming years.
Clearly, it will not be easy. The market is nascent and noisy and there are some worthy competitors out there. Maintaining high growth on quite a large revenue base is hard for every company, especially when products are complex and where market education is still often required. We strongly believe this team is up for the challenge and we are excited by what’s ahead for Dynamic Yield.