With $30M Infusion, Certona Aims for Bigger Share of Digital Retail

After raising $30 million, San Diego-based Certona said it is moving to accelerate its product development, expand its sales and marketing team, and improve its client services as an e-commerce technology vendor.

If online retailing is one of the most tumultuous and fast-changing corners of the Internet, the growth of marketing technologies that retailers use to serve their customers and to personalize their shopping experience has been an even wilder ride. Certona describes itself as an “omnichannel” vendor—meaning its technology enables retailers to collect consumer data across online, mobile, e-mail, call center, and in-store interactions. Certona uses the data to offer shoppers personalized options based on “real-time profiling.”

In a recent interview, Certona CEO Meyar Sheik said the company has taken a measured approach since he founded Certona in 2004 with CTO Geoffrey Hueter. The company now has about 130 employees, and counts Petco, Advance Auto Parts, Pier 1 Imports, and Charlotte Russe among its 500-plus retailer customers in over 70 countries.

Unlike many of its rivals, Sheik said Certona had raised a total of only $7 million in venture capital (in 2008) from ABS Ventures of Waltham, MA, and San Diego’s Express Ventures. “We’ve been fairly capital-efficient in this fast-growth e-commerce space,” Sheik said. “It wasn’t about raising multiple rounds and burning jet fuel. It has allowed us to scale in a very measured way.”

In contrast, San Francisco-based RichRelevance, founded in 2006, has raised nearly $102 million from 11 investors through nine funding rounds, according to CrunchBase. ExactTarget, another rival that was founded in 2000 in Indianapolis, IN, raised over $188 million in venture capital funding before going public in 2012—and getting acquired by Salesforce in a 2013 deal valued at $2.5 billion. Salesforce added another digital commerce giant earlier this year with the acquisition of Burlington, MA-based Demandware in a deal valued at roughly $2.8 billion

It also is a burgeoning sector. The Internet Retailer Conference & Expo set for Chicago next June lists over 600 exhibitors, including Adobe Systems, Certona, Episerver, and Kibo Software.

Sheik, who was previously the chief marketing officer and COO at San Diego’s WebSideStory, said the sector has exploded in recent years as Certona and its rivals have combined the capabilities of traditional Web analytics with predictive analytics software, machine learning, and artificial intelligence.

“When you get all that data and analyze it, you get interesting insights,” Sheik said. “It’s really about understanding visitor behavior and using that to understand and improve” the performance of e-commerce websites.

To compete in such a big and robust market, Sheik said Certona’s “fundamental difference is our focus, deep specialization, and a track record where we can demonstrate incremental performance improvements and a proven, scalable technology platform.”

The $30 million that Certona raised recently from the growth equity firm Primus Capital will enable Certona to add new capabilities to its Web-based platform and expand into new markets and geographies.

As a business-to-business technology provider, Sheik said he sees new market opportunities for Certona in other sectors, such as the travel and hospitality industries, and “wherever anyone wants a better [online shopping] experience. The differentiator is going to be customer experience.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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