Customer data analytics startup Lexer has exploded out of stealth mode with a $33.5 million funding round, for its tech helping small businesses connect with their customers online, and convert that connection into sales.
The round was co-led by Blackbird Ventures and River King Capital, and Blackbird partner Rick Baker is set to join the board of the business.
January Capital, which invested in Lexer’s Series A round four years ago, also participated again.
Founded 10 years ago by Chris Brewer, Aaron Wallis and Dave Whittle, Lexer is a Software-as-a-Service solution for direct-to-consumer retail businesses.
The platform collects and integrates customer data from every available source, and enriches it using data science, AI and machine learning, Whittle tells SmartCompany.
It then offers simple analytics and workflow tools, allowing retailers to generate insight on their customers, informing anything from social media targeting campaigns to customer service to automating the sales journey.
It’s about understanding your customers, in order to “genuinely engage with them at every stage”, Whittle explains.
Customers include big names such as Quicksilver, Zimmermann, Billabong, Optus and The Iconic.
But, more and more, the startup is onboarding small and micro-businesses too.
While he doesn’t reveal any specific revenue growth figures, Whittle does reveal that the business grew by “between 50% and 100%” during 2020, as COVID-19 led to a spike in e-commerce activity.
But the pandemic also coincided with the release of more products, he explains. The business was already on a strong growth trajectory.
“It’s not like we’ve been operating for ages and then COVID came and whammo,” the founder explains.
“It’s a combination of lots of different things.”
Right time, right tech
This business is breaking even and growing, and it’s proven it can attract customers, keep big-name brands on board and help them grow.
It has also successfully expanded into the US, and now has offices in New York and San Francisco, as well as in Sydney and Melbourne.
But at the same time, COVID-19 means the market is now ready for a product such as Lexer, and the incumbents in this space have been slow to evolve to meet the changing needs of retailers.
The startup’s growth, and the environment, all made this the perfect time to raise a significant chunk of capital and really ramp up growth, Whittle says.
“You can have the greatest product, but if the timing is wrong it’s very tricky,” he says.
This funding round comes at a time when customer data has arguably never been more important, particularly for small businesses.
Technology such as Shopify and Afterpay have made it easier than ever to start an e-commerce business, Whittle notes.
But, traditionally, small operators haven’t had access to the kinds of sophisticated, enterprise-grade technology that larger brands have.
“We really see the huge opportunity to take the enterprise-grade solution and offer it to everyone everywhere,” the founder says.
At the same time, having a people-centric solution can help a small business to cut through the noise online, and connect with customers in a way that will help them stand out.
“In this digital world, everybody has an increasing desire for human touch — for being treated like a human,” Whittle notes.
Lexer deals with human data, to help retailers deliver a human-centric experience online.
More and more, that’s what the end customer craves, too. Ultimately, it can lead to bigger baskets and more conversions.
“You can’t have a genuine engagement with somebody if you don’t know who they are.”