Betaout raises $1.5M to help e-commerce companies manage marketing campaigns

Betaout, a marketing automation platform for e-commerce companies, plans to expand in India, Southeast Asia, and the United States after closing $1.5 million in pre-Series A funding.

Along with earlier seed funding, this brings Betaout’s total raised so far to about $2 million. The list of investors in its new round include Beenext, Stanford Angels, Letsventure, Chennai Angels, Hyderabad Angels, and Mumbai Angels. Previous backer Sam Yagan, former CEO of The Match Group and founder of Corazon Capital, also returned for the pre-Series A.

Launched in 2014, the company’s new capital will be spent on signing new clients and improving its analytic tools. Founder and CEO Ankit Maheshwari and his brother Arjun (Betaout’s COO), both serial entrepreneurs, decided to focus on e-commerce marketing after encountering an annoying problem with one of their own purchases.

The two ordered a coffee machine and were pleased with the site’s customer service after paying for delivery and installation. Then ten days later, they got an automated email promoting the same machine for a 45 percent discount. They sent it back for refund and ordered it again with the lower price, but were still out on the extra expenses.

“Afterward we thought about this. Those guys are sending these messages to every person in their customer database, but they have no context. As a customer, I lost money on shipping and installation costs,” says Maheshwari. “Every e-commerce marketer has five to seven tools and bringing them together is very difficult. So we saw a great opportunity to help them.”

Betaout wants to take advantage of India’s burgeoning e-commerce market, which is the fastest-growing in the world and may be worth $119 billion by 2020, according to research by Morgan Stanley. One of its biggest clients there is Paytm, which was also an investor in Betaout’s seed round.

Betaout is also homing in on growth in Southeast Asia, where users include marketplace Tokopedia, one of the region’s most well-funded startups, and the U.S., where it participated in Techstars Chicago’s accelerator program last year.

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Maheshwari says Betaout’s platform is currently used to send an average of 350 million personalized messages every month and has about 100 million customer profiles in its database. The company’s tools are an alternative to leading marketing automation platforms, like Hubspot, that focus mostly on business-to-business interactions instead of retail sales.

“The B2C marketer manages the entire customer lifecycle, from selling to shipping and returning a product. Most of the market leaders in marketing automation are B2B and you cannot sell a B2B platform to e-commerce companies. They are different beasts altogether,” says Maheshwari.

At the same time, there are a lot of other cloud-based B2C marketing platforms popping up for online retailers. A couple of Betaout’s competitors include AgilOne and SugarCRM. Betaout’s goal is to establish itself as a market leader by creating what Maheshwari describes as an “operating system for marketers.” This means that it not only lets e-commerce businesses organize all the channels (SMS, email, advertising, etc.) they use to communicate with customers in one place with analytics to avoid problems like the coffee machine incident, but also integrate with other marketing and customer relationship management tools, including Hubspot.

“There is no Hubspot or other market leader in e-commerce marketing automation at this point. There are a couple of startups coming up, but it’s a huge market,” says Maheshwari. “Huge markets always attract a lot of competition and now we have to outperform or outsell them.”