Coveo Funding Hits a Deep Drift $34 Million

December 14, 2012

I was slogging through the Swedish snow when my mobile phone beeped. I glanced at the tiny screen on my Canadian-engineered BlackBerry and saw an interesting headline: “Coveo, Canada’s Big Data Offering, Nabs $18 Million as It Edges Closer to Profitability.” The article told me:

Coveo, the Quebec-based big data analytics company, has received a massive $18 million from local growth equity firm, Tandem Expansion Fund. It is best known for its recently-launched Coveo for Salesforce product, a cloud-based application which delivers quantitative insights about customer interactions. The app works by pushing relevant real-time information to sales and marketing teams, whether its an account, a lead, or new opportunity.

Interesting positioning. I thought about Vivisimo—the company with the deduplication and on-the-fly categorization technology—transforming into a Big Data company after IBM’s PR department wordsmithed the company.

The Venture Beat story about Québec-based Coveo included another fascinating factoid, which I assume is accurate. How am I to judge coping with the brisk wind howling down the fjord? To wit:

The company will use the funding to build out its sales and marketing team, as it anticipates “hyper-growth” in 2013, according to a press release. It anticipates that it will be “operating at or close to profitability” in 2013.

I highlighted the words which stuck in my mind: hyper-growth and close to profitability. Both are good notions, particularly when there are millions of investors’ dollars waiting for the Canada goose to yield its down. (My arctic grade overcoat is stuffed with goose feathers from Canada, by the way.)

The pointy icicle which lodged in my mind was contained in this statement in the story by Christina Farr:

All major existing investors also participated in the round, including BDC Venture Capital, Propulsion Ventures SEC and Fonds de solidarité FTQ. This round of funding brings the company’s total investments to $34.7 million.

Coveo was founded in 2004, according to Wikipedia. Note that source. Assume the data are correct. Coveo has been generating revenue but has required the alleged $34 million to get near profitability. In eight years, the company has required $4 million in year plus whatever it generated from the license to its software.

The Wikipedia write up is not clued into the actual Big Data functions of Coveo. In fact, that source, which may be out of sync with reality, points out that Coveo is in this business:

CRM and Contact Centers for sales & service, WCMs for one-to-one marketing, and Enterprise Content for engineering and operations. Coveo Role-based Insight Consoles™ provide advanced navigation into consolidated, correlated information mashups, within any application, including Coveo for Salesforce.

Coveo’s own Web site is the definitive source. Here’s what the company says is its core competency at www.coveo.com:

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The three main lines of business, which I may be misreading as the snow collects on the screen of my outstanding BlackBerry mobile device, are:

  1. Coveo for Web content management
  2. Coveo for CRM, Sales and Support
  3. Coveo for Enterprise Content.

I ran the query “Big Data” in the search box on the Coveo Web site despite the numbness of my fingers and here’s the hit list:

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There were 23 hits to “Big Data” and three of the first 10 were about the funding. One was about a deal for the L’Oréal company in Switzerland, and the others were descriptive. The Vivisimo favored term “federated” was in one of the hits.

I found this positioning fascinating to say the least, my search skills really bad, or the search engine on the site not handling the bound phrase correctly. I was in Sweden on a project related to Big Data. After two days of trudging through the 10 go-to algorithms used to tame Big Data, I was tired. I had been reviewing the high potential firms using open source technology to go after deep snowfall problems in tweet streams and mobile phone traffic analysis. However, the firms, systems, and methods I was discussing did not reference traditional vendors of enterprise search, nor do most of the firms in my analytic scope used too much of the old style key word search and metadata faceting which characterizes the older information retrieval methods. Heck, I don’t use wooden snowshoes. These are nifty nylon and next-generation composite gizmos. Big Data is the same: advanced methods and techniques.

I am either lost in a mental snow bank, or this news story about Coveo’s funding is a positioning effort.

With another $18 million to invest in hyper growth the achievement of profitability is a possibility. I will have to revisit my list of Big Data players with an eye to including Coveo among the likes of companies which do not have their roots anchored deep in content management, customer support, and enterprise content.

Once I get out of my foul weather gear, I have to check to see how I could have omitted Coveo, Vivisimo, and other enterprise search vendors from my list of next-generation Big Data system vendors. This goose has lost some feathers it seems. Well, it is 3 pm here in Sweden and night has fallen. Back to the jaktstuga.

Stephen E Arnold, December 14, 2012

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