Localytics was one of Boston’s tech darlings.
One of the startups in Techstars Boston’s inaugural cohort back in 2009, the Boston-based mobile engagement platform company quickly proved that it could scale. In 2015, we referred to it as “one of Boston’s fastest rising stars in tech over the past few years.” That was the same year it raised $35 million in a Series D round, making it among the best-funded startups in the area.
“If you go back to about 2015 or 2016, it looked like, ‘Wow, Cinderella story,'” CEO Jude McColgan said in a December interview with BostInno. “In hindsight, what a lot of companies do when you’re at that phase is focus on hypergrowth or growth at all costs. You get into this proverbial ‘gotcha,’ where you’re growing and growing, and anything less than that hockey curve—less than 50 or 60 or 100 percent year-over-year growth—seems like a letdown. It’s difficult to say in that moment, ‘Are we capturing the right growth?'”
By January 2016, it became apparent that hiring had outpaced its overall growth. Localytics laid off 37 people, about 15 percent of its total workforce. That was the first snag for the company, which has spent the last few years developing the narrative that it is on the rebound. In June 2017, Localytics brought in McColgan to replace its longtime CEO, co-founder Raj Aggarwal.
Under McColgan’s leadership, Localytics cut back and refined its focus. (It also largely stayed out of the press.) The company went from serving as many as 700 customers to serving about 250 customers today, McColgan said in the interview. Today’s customers are the most engaged—they’re the companies that are likely to invest in Localytics’ technology in the long term and spread the word about the company to their peers.
“What sometimes happens for other technology companies like Localytics, and what happened to us, is once you get to a certain kind of scale, you need to start to listen to the customers more deliberately than when you’re only an entrepreneur,” McColgan said. “The definition of an entrepreneur is you’re out ahead, you’re out in front of the market—you know best. At some point, you have to say, ‘O.K., I can’t continue to have that foresight, that arrogance. I actually need to stop and say, ‘How do I listen to what my customers are appreciating or not appreciating and build a [better] innovation or product?'”
The self-reflection seems to have worked. On Friday, Localytics was acquired for $67.7 million in cash by Austin-based Upland Software, which develops cloud-based enterprise work management software.
Localytics’ software will be integrated into Upland Software’s Customer Experience Management (CXM) Cloud.
“Localytics technology and expertise are powering app experiences that convert at a consistently higher rate across key consumer verticals like telco, media, retail and consumer finance,” Jed Alpert, executive vice president and general manager of the CXM Cloud at Upland Software, said in a statement. “Localytics is a perfect addition to our CXM Cloud, the only mobile-focused platform that harnesses the power of messaging, apps, email and web interactions to serve today’s consumer on their digital channels of choice.”
According to the statement, technology from Localytics’ mobile app marketing product will be used to expand to more consumer touchpoints, allowing CXM Cloud customers to better target audiences.
