Sailthru Turns $8M Series A, Led by RRE Ventures, Into Plan to Double Staff

9/28/11Follow @jpruth

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content publishers and e-commerce companies communicate with their individual customers. “Rather than sending the same entire newsletter that’s the same for everybody, we can tailor the content down to that [individual] user,” he says.

E-mail, Capel says, is used more frequently to reach customers, especially in the burgeoning era of flash sales. “Ever since Gilt and Groupon, the volume of e-mail every user gets is so tremendously different than a year ago,” he says. The flipside to increased e-mail output is the potential for such messages to be ignored or dumped as spam. “If it’s not relevant, you don’t care about it,” Capel says.

While many companies communicate with customers via e-mail, Capel says flash sales websites in particular rely on the medium to announce the latest deals. The rise of Gilt and other flash sales sites, he says, have increased the importance of rewarding dedicated customers with relevant deals and content. “If you are not sending the right offer, they are going to unsubscribe,” Capel says. For example, he says, a customer in New York may be more interested in restaurant deals while a customer in a different city may be more interested in offers for spas.

Sailthru uses clickstream data—a record of where users click while browsing websites—from its clients to determine which sales, deals, and other content will be of interest to individual recipients. The content is chosen based on each recipient’s past interactions with the companies that originate the content. That keeps the customer from receiving newsletters or repeats on the same deal, Capel says.

Neil Capel says his staff will double within 12 months.

The company uses a behavioral algorithm to determine the content for each e-mail recipient, a service that Capel claims that third-party providers have yet to match. He is also undaunted by the possibility of e-commerce companies attempting to handle such e-mails on their own. Delivering messages focused on the individual among the masses requires specialists. “We see a few clients talk about doing this in-house,” he says, “but making sure you get 5 million e-mails out in 20 minutes is a difficult [task].”

Sailthru got its start after Capel was disappointed by the way other providers mishandled sending e-mails to customers on his behalf. Capel previously served as chief technology officer for such companies as Money-Media, Musicnation, and Hyphen. When he wanted automated messages sent to customers, especially to welcome them after initially signing up, he says the e-mails sent through the third-party providers tended to be delayed by several hours, if they were sent at all. “They failed me on some level, especially when it came to real time [delivery],” he says.

The startup became cash flow positive in April, Capel says. The latest funding round will help the company nearly double its staff of 31 to 60 within 12 months and open more offices in North America and Europe. Sailthru currently occupies shared space provided by AOL Ventures. The startup is hiring, Capel says, with emphasis on expanding the sales staff as well as its development team. “This is all expansion cash; it is about taking as much of the market as we can,” he says.

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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