E-Mail Testing Company Litmus Nabs $49M in First VC Round

Mobile apps might represent the future for brands selling their wares, but e-mail remains a crucial tool for digital marketers.

At least, that’s the bet that Spectrum Equity made with a $49 million investment in Litmus, a Cambridge, MA-based company that helps marketers create and test e-mail messages and then analyze their campaigns.

The funding is a big step for U.K.-born Litmus, whose only previous source of outside funding was a small bank loan a decade ago, BetaBoston reported. Litmus’s three co-founders—Paul Farnell, Matthew Brindley, and David Smalley, former freelance Web designers who grew up together—bootstrapped their way to profitability and a 40-employee company that serves more than 250,000 e-mail marketers, the company says.

Litmus will try to accelerate that growth with the money from Spectrum, a private equity firm with offices in Boston and San Francisco that has also backed SurveyMonkey, Lynda.com, GrubHub, and others. Litmus says it will use the money for product development, hiring engineers and sales people, and expanding internationally. (The company’s other office is in London.)

Litmus says e-mail is the top channel for digital marketers to reach their target audience, and it has an estimated 38-to-1 return on each dollar invested. It’s also one of consumers’ favored methods for interacting with brands, Litmus says.

The company says its software helps shave hours off the e-mail creation and testing process. Its offerings include a checklist tool that helps proof e-mails, spotting things like broken links and missing images.

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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