Predicting customers’ purchasing patterns is easier said than done. It necessarily involves collecting huge amounts of data, and growing and maintaining the resulting datasets over the course of months (or years). And that’s only the start — sussing out the corpora’s key metrics requires purpose-built sophisticated, scalable analytics tools.
Former BioWare senior systems architect Mike Babineau and Electronic Arts analytics product manager Lillian Chou were inspired to tackle the problem while working at game developer and publisher Rumble Entertainment, where they engineered large-scale infrastructure and pipelines to query data. Their work with complex datasets laid the groundwork for Second Measure, a San Mateo-based Y Combinator alumnus developing a self-service “data exploration” platform that supports both daily and real-time transactional tracking.
Second Measure has already attracted customers like Postmates, Domino’s, Spotify, Lime, DoorDash, and Ancestry.com, and it’s setting its sights on expansion. The startup today announced that it has secured $20 million in series A financing co-led by Bessemer and Goldman Sachs, with participation from Citi Ventures.
It comes after a $5.3 million seed round in April 2016, and brings the total capital raised to $25.4 million. Babineau said the fresh funds will be used to expand Second Measure’s team and infrastructure.
“Traditional market research is typically slow to deliver information that is often static, biased, and based on small sample sizes,” he said. “We are at a tipping point now, with the ability to present data that truly represents company performance and consumer behavior on a current daily basis.”
Second Measure’s platform ingests and analyzes billions of anonymized credit card transactions from millions of shoppers over time (more than 2 pecent of all U.S. consumer spending), building a record of purchases from which its machine learning algorithms glean insights. Those insights are collated in an online dashboard from where they can be compared and broken out by geography or time window, and used to inform predictions.
Its behavioral tracking tools let users dig deeper by highlighting customers’ lifetime values, the other places they shop, and the businesses to which they turn after they abandon a brand. When news of Chipotle’s norovirus broke, for instance, Babineau says that Second Measures tools showed the sales impact immediately — and which restaurants customers chose to visit instead in the aftermath.
Uniquely, Second Measure doesn’t restrict its analyses to a client’s own data. It draws on “strategic partners” for performance metrics from thousands of private and public companies, enabling investors to get an entire market’s worth of consumer purchase data, retention, cohort analysis, and revenue growth, and allowing retail companies to see the daily spending habits of both their customers and their competitors’ customers.
Financial firms like Greylock Partners and Neuberger Berman use Second Measure’s suite to identify fast-growing companies and benchmark competitors, Babineau says, as do media outlets like Bloomberg, CNBC, Recode, and Wall Street Journal.