Kitchener-based video marketing startup Vidyard has received $18 million in funding, valuing the company at $100 million. Founder Michael Litt says it will use to expand its staff and stimulate R&D efforts into front-end video creation and hosting solutions.
Vidyard’s technology enables marketers to create, host, deliver and analyze one-to-one video campaigns, through integration with CRM platforms like Eloqua and Salesforce. A significant part of its clientele is B2B looking to generate and nurture leads through email video campaigns. The real-time analysis of which videos are being watched, when and for how long has proven invaluable for clients to find leads and optimize their client communications.
The Series B funding round was led by Silicon Valley investment group Bessemer Venture Partners, and involved 11 major investors. Bessemer is also a major investor in Shopify, an Ottawa retail technology company that is rumoured to be planning a big U.S. IPO this year.
Litt said the new round of funding, which brings the company’s total raised to $28 million, will primarily be used to expand the core of engineering staff on Vidyard’s team. Though the core capabilities of the Vidyard platform are complete, it’s continuing to build API integrations with CRM and enterprise marketing platforms, and it’s improving the front-end experience with new products.
“Our product today can take a video that’s already been produced, stream it, serve it, analyze it, add some lead generation and lead nurturing to it, and give that data to sales,” he said. “The one piece that’s kind of missing there is the content production technologies, and that would be at the very front of that flow.”
The company recently launched a new product, Vidyard Studio, which improves the platform’s onboard content production capabilities. Using Studio, B2B marketers can upload powerpoint presentations and create animated voiceovers that they can then post on their websites or send to clients.
Vidyard also plans to bring on new “smarketing” associates to help build the company’s sales and marketing presence. In total, the team is expected to grow from 60 to 150 heads over the next two years.
Litt said though Vidyard approached Bessemer during its Series A, at the time the company didn’t see the market opportunity. But today, with several big years of growth behind the company, the size and sustainability of the market is clear.
“We’ve been fortunate to experience double-digit month-over-month topline growth. No matter where you are, that would be exciting to an investor,” he said. “Because the product delivers on its promise, and does what’s required for our customers, we have very little churn. We’ve only lost about two customers in our lifetime.”
Before founding the company in 2010, Litt was a member of influential startup incubator Y Combinator startup in Silicon Valley, where he built a solid understanding of what U.S. investors are looking for in a tech company. Afterwards, he decided to return to Canada, where there’s less competition for engineering talent and better government support for small businesses. In 2014, he was named one of Marketing’s 30 Under 30.
“We’re a Canadian-based company with a Silicon Valley network,” he explained. “I go to the Valley, meet lots of people, experience the hype, and then come home and put my head down and get lots of work done.”
Thanks to Waterloo University and the presence of large tech firms like Blackberry and Google, the Waterloo-Kitchener region is quickly becoming a hub of tech startup activity. Litt said while the more mature startups still rely on funding from the Valley to take the next step, Kitchener-Waterloo is much less cutthroat, and has a much stronger sense of community.
“There’s a different culture emerging in this area that’s very attractive,” he said. “They have kind of that West Coast style, but none of the bullshit that comes with it. It’s not a super competitive talent market here, so there’s not this jaded startup-vs-startup thing that goes on. We’re all doing our own thing, we’re all supporting each other.”
He said the company would use some of the new money to improve its business development and sales training program, which gives recent graduates a strong foundation in B2B technology sales and marketing. “I think for this community, we’ll be able to produce a ton of really talented individuals that will inevitably become talent resources for the next generation of organizations [in the Kitchener-Waterloo region].”