Quantum Metric, an enterprise SaaS startup that helps companies calculate how much revenue is lost from bad website design, today announced a $25 million round of venture capital financing, led by Insight Venture Partners.
Launched in 2015 and headquartered in Colorado Springs, Quantum Metric had raised just $1 million in seed funding from Bain Capital prior to today’s announcement.
CEO and founder Mario Ciabarra told VentureBeat in a phone interview that the company has been “cash flow neutral” up to this point, primarily subsisting on its own revenue and some $1 million of Ciabarra’s own money that he invested into the company at its inception (Ciabarra was previously the founder and CEO of a company called Intelliborn).
Quantum Metric describes itself as a “digital experience analytics” company. Essentially, its software aggregates data points that indicate a user is having trouble navigating a website — if they click add to cart, the back button, or refresh the page repeatedly, for example. Quantum Metric then calculates how much revenue the company potentially lost thanks to that poor website design — by looking at the value of the order in carts, for example.
“All of a sudden, I can get a sorted list of where I can recover revenue, where I can improve experiences on digital,” said Ciabarra. He added that while engineering, product, and marketing teams have an increasing array of their own analytics tools to choose from, cross-discipline solutions are still lacking.
By showing how much revenue a company is losing, Quantum Metric’s software gets the whole team to understand how big an issue poor UX can be. Ciabarra gave the example of a customer who — through Quantum Metric’s software — identified 200 visitors who were having problems checking out each day. The site gets about half a million visitors each day, so on the surface, it didn’t seem like such a big issue. But Quantum Metric calculated that the error cost the company $3 million a year.
Ciabarra told VentureBeat that the closest similar solution on the market is IBM Tea Leaf. Quantum Metric has fewer than 100 customers, most of them B2C companies, including Neiman Marcus and 1-800 Contacts. It’s a subscription service, with the smallest customers paying $100,000 a year, up to those shelling out more than $1 million to use Quantum Metric.
With just 40 employees, Quantum Metric is still a relatively small operation — so the new round of funding will help dramatically accelerate its growth rate. Ciabarra said the company will use the funds to hire about 60 employees in the next six months, about half of them in Colorado. He also said the company is projecting a 400 percent year-over-year revenue increase this year, though he declined to give specifics.