Localytics Lands $16M, Leads Way for Mobile Startups in the Middle

2/4/14Follow @gthuang

For all the talk about tech startups and big exits, there needs to be more discussion about companies in the middle. The ones that have been working away for five or six years, trying to break through and become real, sustainable businesses.

Localytics is one of those. The Boston mobile-tech company got started in 2008. It went through the Techstars Boston accelerator program, raised a couple rounds of venture funding, and generally kept its head down for the past few years.

Now it has raised a $16 million Series C round led by Foundation Capital, a new investor. Polaris Partners, a previous investor, also participated in the round, which brings Localytics’ total funding to $25 million. The company has grown to 75 employees, with satellite offices in San Francisco and London.

What Localytics is trying to crack is the mobile-app marketing problem: in a sea of millions of apps, how do you give developers the right tools to track usage and understand their audience so they’ll get more users and make more money? (The fancy words for this are “mobile analytics” and “closed-loop marketing platform.”)

The company’s payoff so far is big customers like ESPN, eBay, Fox, and the New York Times. Localytics says it tripled revenues for the fifth straight year in 2013—which is startup-speak for “we finally figured out what we’re doing.”

The key for any startup is to survive by any means necessary until it starts making real money. It sounds like Localytics has done that. Now it has to break through in a hyper-competitive arena full of different approaches and lots of noise.

As CEO Raj Aggarwal puts it in a statement, “The app business has grown up.” He adds that the new money will help Localytics enhance its tech platform, expand business internationally, and drive more usage for its customers’ apps.

The Boston area has many companies working on the development and analytics side of mobile apps: Alpha Software, Apperian, Kinvey, Raizlabs, uTest, and Crashlytics (owned by Twitter), to name a few. And on the marketing side, there’s Fiksu, Apptopia, and others.

Those last two are definitely worth watching in the app-marketing sector, along with Localytics. Fiksu is another mature startup in town that has quietly become a serious moneymaker—and probably a big acquisition target. Apptopia is a younger upstart that has just raised a bridge financing round and seems to understand the app ecosystem.

All very different approaches in mobile apps—which is another sign of diversity in the Boston tech scene.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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