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How Klaviyo transformed from a lifestyle business into a $4.15B email titan

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Startups are stories of feverish dreams and obsessive fears. Short of hearing it from the source, a glimpse into the inbox of a founder would be the best way to experience the travails they endure on the way to building a business. A customer finally makes a purchase, a VC invests or walks away, an employee signs their offer letter — all of the major and minor milestones of a startup are communicated via that now-ancient medium of email.

Current Klaviyo users may be surprised to hear that email was not a part of the initial product.

Email’s ubiquity is only part of the story, though. It’s also a symbol of freedom: The last social platform that remains relatively open and free from the clutches of a single monopoly owner. It’s a market rife with entrenched incumbents, but one that simultaneously continues to invite founders to find some new take on this venerable communications channel and make it better for everyone.

That was the mission that Andrew Bialecki and Ed Hallen undertook when they founded Klaviyo back in 2012. What they perhaps didn’t bank on was just how long of a route they were about to take — or how many rejections they might find in their own inboxes from accelerators and VCs who never thought a new generation of email service providers could make it.

So they bootstrapped, kept things lean. They debated canceling dinners to pay the bills when customers churned. And along the way, they built a special startup that is today valued at a whopping $4.15 billion. Klaviyo is the story of how two scrappy, inexperienced entrepreneurs set out to build a lifestyle business — and ended up creating an email titan.

Racing to the starting line

Klaviyo’s origin story sounds a bit like the generic advice given by every book on entrepreneurship. Andrew Bialecki — he goes by AB — had a need that no existing company filled. So, he started a company to address that need.

It began with what he calls a side hustle: a website devoted to cataloging the dates and locations of running races. Bialecki had the technical chops to build it, but the data wasn’t already available online and he needed race organizers to provide it. That, in turn, meant he needed to let them know his site existed and constantly follow up to make sure they were using it.

“I realized I’m on the phone with people and it’s never going to scale. After a while, I was working on that while I was at another startup, and I said I have two options here. Either I can go all-in on road races, or all-in on the problem: ‘How do we help these businesses connect with the people using their software or products?’” recalls Bialecki.

By then, he already had a co-founder in mind. Bialecki had been a student together with Ed Hallen at MIT, but the pair actually met while working at Applied Predictive Technologies (APT), a Washington, D.C. tech consultancy.

“I’d read all those books on, hey, when you’re looking for someone to start a business with, you want someone with similar values who’s also complementary,” says Bialecki. “I’d known he was kind of interested in starting a company, and we had really complementary skillsets. I loved the engineering and design and product, and he was a big product guy too, but was used to working with customers and clients.”

An email company that didn’t (initially) do email

Current Klaviyo users may be surprised to hear that email was not part of the product that emerged. Instead, Bialecki and Hallen built a database to collect all the e-commerce data that was falling through the cracks.

“Once we really talked to a lot of e-commerce people, it was clear there were long-standing problems,” says Hallen.

Bialecki adds, “There are facts you know, like their name, their email address, their favorite color or something they told you about their birthday. But some of the harder stuff was, jeez, how many times has this person visited my website, bought something from me, what products did they buy and how is that trending over time? Were they a really frequent customer that dropped off the face of the Earth?”

As they spoke to customers, the founders realized that handling customers’ data and making it useful to them was going to be critical to Klaviyo’s success. It just so happened that gathering data matched well with their experiences working at APT.

“We had a ton of experience stitching together data sources,” says Hallen. “We took that expertise and put it as our foundation. What’s the most broken, largest market, and let’s really tie data to it, not as an afterthought.”

Klaviyo’s two co-founders Andrew Bialecki and Ed Hallen in July 2012. Image Credits: Klaviyo

What that required, in practical terms, was spending the initial months building a custom database to store the disparate data types that come up during e-commerce transactions — events, documents and object data models. Conor O’Mahony, who joined the company in 2018 as chief product officer and departed this month to become an advisor, says that the company’s early time investment in its database laid the foundations for its later success in scaling up.

The Klaviyo EC-1

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E-commerce is booming as retailers race to transform their brick-and-mortar footprints into online storefronts. By some counts, the market grew an astonishing 42% in 2020 in the wake of the COVID-19 pandemic, and estimates show that online spending in the U.S. will surpass $1 trillion by 2022. It’s a bonanza, and everyone is figuring out this new terrain.

Consumers are likely familiar with the front-end brands for these storefronts — with companies like Amazon, Shopify, Square, and Stripe owning attention — but it’s the tooling behind the curtain that is increasingly determining the competitiveness of individual stores.

Klaviyo may not be a household name to consumers (at least, not yet), but in many ways, this startup has become the standard by which email marketers are judged today, triangulating against veterans Mailchimp and Constant Contact and riding the e-commerce wave to new heights.

Founded in 2012, this Boston-based company helps marketers personalize and automate their email messaging to customers. By now, most people are intimately familiar with these kinds of emails; if you’ve ever given your email address to an online store, the entreaties to come back to your abandoned cart or browse the latest sale are Klaviyo’s bread and butter.

It may seem obvious in retrospect that email would grow to become a premier platform for marketing, but this wasn’t the case even a few years ago when social ads and search engine marketing were the dominant paradigm. Today, owned marketing and customer experience management are white-hot trends, and Klaviyo has surged from a lifestyle business to a multi-billion dollar behemoth in just a few short years. Its story is at the heart of the internet economy today, and the future.

TechCrunch’s writer and analyst for this EC-1 is Chris Morrison. Morrison, who previously wrote our EC-1 on Roblox, has been a writer and independent game developer covering the video game industry and the marketing challenges that come with publishing. As an analyst and a potential user, he’s in a unique position to explain the Klaviyo story. The lead editor for this package was Danny Crichton, the assistant editor was Ram Iyer, the copy editor was Richard Dal Porto and illustrations were created by Nigel Sussman.

Klaviyo had no say in the content of this analysis and did not get advance access to it. Morrison has no financial ties to Klaviyo or other conflicts of interest to disclose.

The Klaviyo EC-1 comprises four main articles numbering 9,700 words and a reading time of 43 minutes. Let’s take a look:

  • Part 1: Origin story “How Klaviyo transformed from a lifestyle business into a $4.15B email titan” (2,600 words/10 minutes) — Explores the rise of Klaviyo from a database for e-commerce data into a modern email powerhouse as it successively learned from customers and bootstrapped in the absence of funding from accelerators and early VCs.
  • Part 2: Business and growth “How Klaviyo used data and no-code to transform owned marketing” (3,000 words/12 minutes) — Analyzes Klaviyo’s recent growth and how marketers increasingly focus on owned marketing channels and customer experience management.
  • Part 3: Dynamics of e-commerce marketing “Marketing in 2021 is emotional and not just transactional” (2,200 words/9 minutes) — To fully understand Klaviyo and this new world of martech, this article contextualizes how and why marketers are increasingly trying to personalize and build deeper emotional bonds with their customers outside of social media channels.
  • Part 4: Lessons on startup growth “Drama and quirk aren’t necessary for startup success” (1,900 words/8 minutes) — Founders shouldn’t have to keep learning the same lessons over and over again. Klaviyo offers a number of tried-and-true tutorials to understand how to build a competitive startup and not get bogged down in finding product-market fit and scaling.

We’re always iterating on the EC-1 format. If you have questions, comments or ideas, please send an email to TechCrunch Managing Editor Danny Crichton at danny@techcrunch.com.

How Klaviyo transformed from a lifestyle business into a $4.15B email titan

Once VMware is free from Dell, who might fancy buying it?

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TechCrunch has spilled much digital ink tracking the fate of VMware since it was brought to Dell’s orbit thanks to the latter company’s epic purchase of EMC in 2016 for $58 billion. That transaction saddled the well-known Texas tech company with heavy debts. Because the deal left VMware a public company, albeit one controlled by Dell, how it might be used to pay down some of its parent company’s arrears was a constant question.

Dell made its move earlier this week, agreeing to spin out VMware in exchange for a huge one-time dividend, a five-year commercial partnership agreement, lots of stock for existing Dell shareholders and Michael Dell retaining his role as chairman of its board.

So, where does the deal leave VMware in terms of independence, and in terms of Dell influence? Dell no longer will hold formal control over VMware as part of the deal, though its shareholders will retain a large stake in the virtualization giant. And with Michael Dell staying on VMware’s board, it will retain influence.

Here’s how VMware described it to shareholders in a presentation this week. The graphic shows that under the new agreement, VMware is no longer a subsidiary of Dell and will now be an independent company.

Chart showing before and after structure of Dell spinning out VMware. In the after scenario, VMware is an independent company.

Image Credits: VMware

But with VMware tipped to become independent once again, it could become something of a takeover target. When Dell controlled VMware thanks to majority ownership, a hostile takeover felt out of the question. Now, VMware is a more possible target to the right company with the right offer — provided that the Dell spinout works as planned.

Buying VMware would be an expensive effort, however. It’s worth around $67 billion today. Presuming a large premium would be needed to take this particular technology chess piece off the competitive board, it could cost $100 billion or more to snag VMware from the public markets.

So VMware will soon be more free to pursue a transaction that might be favorable to its shareholders — which will still include every Dell shareholder, because they are receiving stock in VMware as part of its spinout — without worrying about its parent company simply saying no.

Data scientists: Bring the narrative to the forefront

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Peter Wang
Contributor

Peter Wang is CEO and co-founder of data science platform Anaconda. He’s also a co-creator of the PyData community and conferences, and a member of the board at the Center for Humane Technology.

By 2025, 463 exabytes of data will be created each day, according to some estimates. (For perspective, one exabyte of storage could hold 50,000 years of DVD-quality video.) It’s now easier than ever to translate physical and digital actions into data, and businesses of all types have raced to amass as much data as possible in order to gain a competitive edge.

However, in our collective infatuation with data (and obtaining more of it), what’s often overlooked is the role that storytelling plays in extracting real value from data.

The reality is that data by itself is insufficient to really influence human behavior. Whether the goal is to improve a business’ bottom line or convince people to stay home amid a pandemic, it’s the narrative that compels action, rather than the numbers alone. As more data is collected and analyzed, communication and storytelling will become even more integral in the data science discipline because of their role in separating the signal from the noise.

Data alone doesn’t spur innovation — rather, it’s data-driven storytelling that helps uncover hidden trends, powers personalization, and streamlines processes.

Yet this can be an area where data scientists struggle. In Anaconda’s 2020 State of Data Science survey of more than 2,300 data scientists, nearly a quarter of respondents said that their data science or machine learning (ML) teams lacked communication skills. This may be one reason why roughly 40% of respondents said they were able to effectively demonstrate business impact “only sometimes” or “almost never.”

The best data practitioners must be as skilled in storytelling as they are in coding and deploying models — and yes, this extends beyond creating visualizations to accompany reports. Here are some recommendations for how data scientists can situate their results within larger contextual narratives.

Make the abstract more tangible

Ever-growing datasets help machine learning models better understand the scope of a problem space, but more data does not necessarily help with human comprehension. Even for the most left-brain of thinkers, it’s not in our nature to understand large abstract numbers or things like marginal improvements in accuracy. This is why it’s important to include points of reference in your storytelling that make data tangible.

For example, throughout the pandemic, we’ve been bombarded with countless statistics around case counts, death rates, positivity rates, and more. While all of this data is important, tools like interactive maps and conversations around reproduction numbers are more effective than massive data dumps in terms of providing context, conveying risk, and, consequently, helping change behaviors as needed. In working with numbers, data practitioners have a responsibility to provide the necessary structure so that the data can be understood by the intended audience.

Should Dell have pursued a more aggressive debt-reduction move with VMware?

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When Dell announced it was spinning out VMware yesterday, the move itself wasn’t surprising; there had been public speculation for some time. But Dell could have gone a number of ways in this deal, despite its choice to spin VMware out as a separate company with a constituent dividend instead of an outright sale.

The dividend route, which involves a payment to shareholders between $11.5 billion and $12 billion, has the advantage of being tax-free (or at least that’s what Dell hopes as it petitions the IRS). For Dell, which owns 81% of VMware, the dividend translates to somewhere between $9.3 billion and $9.7 billion in cash, which the company plans to use to pay down a portion of the huge debt it still holds from its $58 billion EMC purchase in 2016.

Dell hopes to have its cake and eat it too with this deal: It generates a large slug of cash to use for personal debt relief while securing a five-year commercial deal that should keep the two companies closely aligned.

VMware was the crown jewel in that transaction, giving Dell an inroad to the cloud it had lacked prior to the deal. For context, VMware popularized the notion of the virtual machine, a concept that led to the development of cloud computing as we know it today. It has since expanded much more broadly beyond that, giving Dell a solid foothold in cloud native computing.

Dell hopes to have its cake and eat it too with this deal: It generates a large slug of cash to use for personal debt relief while securing a five-year commercial deal that should keep the two companies closely aligned. Dell CEO Michael Dell will remain chairman of the VMware board, which should help smooth the post-spinout relationship.

But could Dell have extracted more cash out of the deal?

Doing what’s best for everyone

Patrick Moorhead, principal analyst at Moor Insights and Strategies, says that beyond the cash transaction, the deal provides a way for the companies to continue working closely together with the least amount of disruption.

“In the end, this move is more about maximizing the Dell and VMware stock price [in a way that] doesn’t impact customers, ISVs or the channel. Wall Street wasn’t valuing the two companies together nearly as [strongly] as I believe it will as separate entities,” Moorhead said.

Enterprise security attackers are one password away from your worst day

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Ralph Pisani
Contributor

Ralph Pisani is president at Exabeam and has 20 years of experience in sales and channel and business development at organizations like Imperva and SecureComputing (acquired by McAfee).

If the definition of insanity is doing the same thing over and over and expecting a different outcome, then one might say the cybersecurity industry is insane.

Criminals continue to innovate with highly sophisticated attack methods, but many security organizations still use the same technological approaches they did 10 years ago. The world has changed, but cybersecurity hasn’t kept pace.

Distributed systems, with people and data everywhere, mean the perimeter has disappeared. And the hackers couldn’t be more excited. The same technology approaches, like correlation rules, manual processes, and reviewing alerts in isolation, do little more than remedy symptoms while hardly addressing the underlying problem.

Credentials are supposed to be the front gates of the castle, but as the SOC is failing to change, it is failing to detect. The cybersecurity industry must rethink its strategy to analyze how credentials are used and stop breaches before they become bigger problems.

It’s all about the credentials

Compromised credentials have long been a primary attack vector, but the problem has only grown worse in the mid-pandemic world. The acceleration of remote work has increased the attack footprint as organizations struggle to secure their network while employees work from unsecured connections. In April 2020, the FBI said that cybersecurity attacks reported to the organization grew by 400% compared to before the pandemic. Just imagine where that number is now in early 2021.

It only takes one compromised account for an attacker to enter the active directory and create their own credentials. In such an environment, all user accounts should be considered as potentially compromised.

Nearly all of the hundreds of breach reports I’ve read have involved compromised credentials. More than 80% of hacking breaches are now enabled by brute force or the use of lost or stolen credentials, according to the 2020 Data Breach Investigations Report. The most effective and commonly-used strategy is credential stuffing attacks, where digital adversaries break in, exploit the environment, then move laterally to gain higher-level access.

Dell is spinning out VMware in a deal expected to generate over $9B for the company

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Dell announced this afternoon that it’s spinning out VMware, a move that has been suspected for some time. Dell acquired VMware as part of the massive $58 billion EMC acquisition (announced as $67 billion) in 2015.

The way that the deal works is that Dell plans to offer VMware shareholders a special dividend of between $11.5 and $12 billion. As Dell owns approximately 81% of those shares that would work out to somewhere between $9.3 and $9.7 billion coming into Dell’s coffers when the deal closes later this year.

“By spinning off VMware, we expect to drive additional growth opportunities for Dell Technologies as well as VMware, and unlock significant value for stakeholders. Both companies will remain important partners, with a differentiated advantage in how we bring solutions to customers,” Dell CEO Michael Dell said in a statement.

$67 billion Dell-EMC deal closes today

While there is a fair amount of CEO speak in that statement, it appears to mean that the move is mostly administrative as the companies will continue to work closely together, even after the spin-off is official. Dell will remain as chairman of both companies.

In a presentation to investors, the companies indicated that the plan to work together is more than lip service. There is a five-year deal commercial agreement in place with plans to revisit that deal each year thereafter. In addition, there is a plan to sell VMware products through the Dell sales team and for VMware to continue to work with Dell Financial Services. Finally, there is a formalized governance process in place related to achieving the commercial goals under the agreement, so it’s pretty firm that these companies will continue to work closely together at least for another five years.

For its part, VMware said in a separate release that the deal will allow it “increased freedom to execute its strategy, a simplified capital structure and governance model and additional strategic, operational and financial flexibility, while maintaining the strength of the two companies’ strategic partnership.”

Dell shares are up more than 8% following the announcement. The company intends on using parts of its proceeds to deleverage, writing in a release that it will use “net proceeds to pay down debt, positioning the company well for Investment Grade ratings.” By that it means that Dell will reduce its net debt position and, it hopes, garner a stronger credit rating that will limit its future borrowing costs.

Unpacking how Dell’s debt load and VMware stake could come together

Even when it was part of EMC, VMware had a special status in that it operates as a separate entity with its own executive team and board of directors, and the stock has been sold separately as well.

The deal is expected to close at the end of this year, but it has to clear a number of regulatory hurdles first. That includes garnering a favorable ruling from the IRS that the deal qualifies for a tax-free spin-off, which could prove to be a considerable hurdle for a deal like this.

The transaction is not a surprise. The company has been open about its intention to shake up its broader corporate structure. And with Dell bloated in debt terms and, perhaps, in product scope as well, the VMware deal could be an intelligent way forward. Dell investors are more excited about the transaction than VMware shareholders, with the latter company’s stock is up a more modest 1.4%.

VMware’s most recent earnings release notes that it had $4.715 billion in “total cash, cash equivalents and short-term investments.” Perhaps its shareholders aren’t enthused at the prospect of levering VMware’s balance sheet to help Dell do the opposite.

Dell’s debt hangover from $67B EMC deal could put VMware stock in play

 

Cado Security locks in $10M for its cloud-native digital forensics platform

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As computing systems become increasingly bigger and more complex, forensics have become an increasingly important part of how organizations can better secure them. As the recent Solar Winds breach has shown, it’s not always just a matter of being able to identify data loss, or prevent hackers from coming in in the first place. In cases where a network has already been breached, running a thorough investigation is often the only way to identify what happened, if a breach is still active, and whether a malicious hacker can strike again.

As a sign of this growing priority, a startup called Cado Security, which has built forensics technology native to the cloud to run those investigations, is announcing $10 million in funding to expand its business.

Cado’s tools today are used directly by organizations, but also security companies like Redacted — a somewhat under-the-radar security startup in San Francisco co-founded by Facebook’s former chief security officer Max Kelly and John Hering, the co-founder of Lookout. It uses Cado to carry out the forensics part of its work.

The funding for London-based Cado is being led by Blossom Capital, with existing investors Ten Eleven Ventures also participating, among others. As another signal of demand, this Series A is coming only six months after Cado raised its seed round.

The task of securing data on digital networks has grown increasingly complex over the years: not only are there more devices, more data and a wider range of configurations and uses around it, but malicious hackers have become increasingly sophisticated in their approaches to needling inside networks and doing their dirty work.

The move to the cloud has also been a major factor. While it has helped a wave of organizations expand and run much bigger computing processes are part of their business operations, it has also increased the so-called attack surface and made investigations much more complicated, not least because a lot of organizations run elastic processes, scaling their capacity up and down: this means when something is scaled down, logs of previous activity essentially disappear.

Cado’s Response product — which works proactively on a network and all of its activity after it’s installed — is built to work across cloud, on-premise and hybrid environments. Currently it’s available for AWS EC2 deployments and Docker, Kubernetes, OpenShift and AWS Fargate container systems, and the plan is to expand to Azure very soon. (Google Cloud Platform is less of a priority at the moment, CEO James Campbell said, since it rarely comes up with current and potential customers.)

Campbell co-founded Cado with Christopher Doman (the CTO) last April, with the concept for the company coming out of their respective experiences working on security services together at PwC, and respectively for government organizations (Campbell in Australia) and AlienVault (the security firm acquired by AT&T). In all of those, one persistent issue the two continued to encounter was the issue with adequate forensics data, essential for tracking the most complex breaches.

A lot of legacy forensics tools, in particular those tackling the trove of data in the cloud, was based on “processing data with open source and pulling together analysis in spreadsheets,” Campbell said. “There is a need to modernize this space for the cloud era.”

In a typical breach, it can take up to a month to run a thorough investigation to figure out what is going on, since, as Doman describes it, forensics looks at “every part of the disk, the files in a binary system. You just can’t find what you need without going to that level, those logs. We would look at the whole thing.”

However, that posed a major problem. “Having a month with a hacker running around before you can do something about it is just not acceptable,” Campbell added. The result, typically, is that other forensics tools investigate only about 5% of an organization’s data.

The solution — for which Cado has filed patents, the pair said — has essentially involved building big data tools that can automate and speed up the very labor intensive process of looking through activity logs to figure out what looks unusual and to find patterns within all the ones and zeros.

“That gives security teams more room to focus on what the hacker is getting up to, the remediation aspect,” Campbell explained.

Arguably, if there were better, faster tracking and investigation technology in place, something like Solar Winds could have been better mitigated.

The plan for the company is to bring in more integrations to cover more kinds of systems, and go beyond deployments that you’d generally classify as “infrastructure as a service.”

“Over the past year, enterprises have compressed their cloud adoption timelines while protecting the applications that enable their remote workforces,” said Imran Ghory, partner at Blossom Capital, in a statement. “Yet as high-profile breaches like SolarWinds illustrate, the complexity of cloud environments makes rapid investigation and response extremely difficult since security analysts typically are not trained as cloud experts. Cado Security solves for this with an elegant solution that automates time-consuming tasks like capturing forensically sound cloud data so security teams can move faster and more efficiently. The opportunity to help Cado Security scale rapidly is a terrific one for Blossom Capital.”

IBM acquires Italy’s MyInvenio to integrate process mining directly into its suite of automation tools

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Automation has become a big theme in enterprise IT, with organizations using RPA, no-code and low-code tools, and other  technology to speed up work and bring more insights and analytics into how they do things every day, and today IBM is announcing an acquisition as it hopes to take on a bigger role in providing those automation services. The IT giant has acquired MyInvenio, an Italian startup that builds and operates process mining software.

Process mining is the part of the automation stack that tracks data produced by a company’s software, as well as how the software works, in order to provide guidance on what a company could and should do to improve it. In the case of myInvenio, the company’s approach involves making a “digital twin” of an organization to help track and optimize processes. IBM is interested in how myInvenio’s tools are able to monitor data in areas like sales, procurement, production and accounting to help organizations identify what might be better served with more automation, which it can in turn run using RPA or other tools as needed.

Terms of the deal are not being disclosed. It is not clear if myInvenio had any outside investors (we’ve asked and are awaiting a response). This is the second acquisition IBM has made out of Italy. (The first was in 2014, a company called CrossIdeas that now forms part of the company’s security business.)

IBM and myInvenio are not exactly strangers: the two inked a deal as recently as November 2020 to integrate the Italian startup’s technology into IBM’s bigger automation services business globally.

Dinesh Nirmal, GM of IBM Automation, said in an interview that the reason IBM acquired the company was two-fold. First, it lets IBM integrate the technology more closely into the company’s Cloud Pak for Business Automation, which sits on and is powered by Red Hat OpenShift and has other automation capabilities already embedded within it, specifically robotic process automation (RPA), document processing, workflows and decisions.

Second and perhaps more importantly, it will mean that IBM will not have to tussle for priority for its customers in competition with other solution partners that myInvenio already had. IBM will be the sole provider.

“Partnerships are great but in a partnership you also have the option to partner with others, and when it comes to priority who decides?” he said. “From the customer perspective, will they will work just on our deal, or others first? Now, our customers will get the end result of this… We can bring a single solution to an end user or an enterprise, saying, ‘look you have document processing, RPA, workflow, mining. That is the beauty of this and what customers will see.”

He said that IBM currently serves customers across a range of verticals including financial, insurance, healthcare and manufacturing with its automation products.

Notably, this is not the first acquisition that IBM has made to build out this stack. Last year, it acquired WDG to expand into robotic process automation.

And interestingly, it’s not even the only partnership that IBM has had in process mining. Just earlier this month, it announced a deal with one of the bigger names in the field, Celonis, a German startup valued at $2.5 billion in 2019.

Ironically, at the time, my colleague Ron wondered aloud why IBM wasn’t just buying Celonis outright in that deal. It’s hard to speculate if price was one reason. Remember: we don’t know the terms of this acquisition, but given myInvenio was off the fundraising radar, chances are it’s possibly a little less than Celonis’s pricetag.

We’ve asked and IBM has confirmed that it will continue to work with Celonis alongside now offering its own native process mining tools.

“In keeping with IBM’s open approach and $1 billion investment in ecosystem, [Global Business Services, IBM’s enterprise services division] works with a broad range of technologies based on client and market demand, including IBM AI and Automation software,” a spokesperson said in a statement. “Celonis focuses on execution management which supports GBS’ transformation of clients’ business processes through intelligent workflows across industries and domains. Specifically, Celonis has deep connectivity into enterprise systems such as Salesforce, SAP, Workday or ServiceNow, so the Celonis EMS platform helps GBS accelerate clients’ transformations and BPO engagements with these ERP platforms.”

Indeed, at the end of the day, companies that offer services, especially suites of services, are working in environments where they have to be open to customers using their own technology, or bringing in something else.

There may have been another force pushing IBM to bring more of this technology in-house, and that’s wider competitive climate. Earlier this year, SAP acquired another European startup in the process mining space, Signavio, in a deal reportedly worth about $1.2 billion. As more of these companies get snapped up by would-be IBM rivals, and those left standing are working with a plethora of other parties, maybe it was high time for IBM to make sure it had its own horse in the race.

“Through IBM’s planned acquisition of myInvenio, we are revolutionizing the way companies manage their process operations,” said Massimiliano Delsante, CEO, myInvenio, who will be staying on with the deal. “myInvenio’s unique capability to automatically analyze processes and create simulations — what we call a ‘Digital Twin of an Organization’ —  is joining with IBM’s AI-powered automation capabilities to better manage process execution. Together we will offer a comprehensive solution for digital process transformation and automation to help enterprises continuously transform insights into action.”

Bigeye (formerly Toro) scores $17M Series A to automate data quality monitoring

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As companies create machine learning models, the operations team needs to ensure the data used for the model is of sufficient quality, a process that can be time consuming. Bigeye (formerly Toro), an early stage startup is helping by automating data quality.

Today the company announced a $17 million Series A led Sequoia Capital with participation from existing investor Costanoa Ventures. That brings the total raised to $21 million with the $4 million seed, the startup raised last May.

When we spoke to Bigeye CEO and co-founder Kyle Kirwan last May, he said the seed round was going to be focussed on hiring a team — they are 11 now — and building more automation into the product, and he says they have achieved that goal.

“The product can now automatically tell users what data quality metrics they should collect from their data, so they can point us at a table in Snowflake or Amazon Redshift or whatever and we can analyze that table and recommend the metrics that they should collect from it to monitor the data quality — and we also automated the alerting,” Kirwan explained.

He says that the company is focusing on data operations issues when it comes to inputs to the model such as the table isn’t updating when it’s supposed to, it’s missing rows or there are duplicate entries. They can automate alerts to those kinds of issues and speed up the process of getting model data ready for training and production.

Why AWS is building tiny AI race cars to teach machine learning

Bogomil Balkansky, the partner at Sequoia who is leading today’s investment sees the company attacking an important part of the machine learning pipeline. “Having spearheaded the data quality team at Uber, Kyle and Egor have a clear vision to provide always-on insight into the quality of data to all businesses,” Balkansky said in a statement.

As the founding team begins building the company, Kirwan says that building a diverse team is a key goal for them and something they are keenly aware of.

“It’s easy to hire a lot of other people that fit a certain mold, and we want to be really careful that we’re doing the extra work to [understand that just because] it’s easy to source people within our network, we need to push and make sure that we’re hiring a team that has different backgrounds and different viewpoints and different types of people on it because that’s how we’re going to build the strongest team,” he said.

Bigeye offers on prem and SaaS solutions, and while it’s working with paying customers like Instacart, Crux Informatics, and Lambda School, the product won’t be generally available until later in the year.

Toro snags $4M seed investment to monitor data quality