Privy, a Boston-based startup that provides online marketing tools for small businesses, announced on Thursday it raised $4.25 million in Series A funding.
The round, which brings the company's total funding to $8 million, was led by Sam Clemens, general partner at Accomplice. The Cambridge venture capital firm also led Privy's previous $2.1 million funding round, which dates back to November 2017.
Clemens is the founder of Boston-based sales analytics provider InsightSquared and a former VP of product at one of Boston's online marketing behemoths, HubSpot.
Growing up in a family with two small business owners, Privy Founder Ben Jabbawy saw firsthand the need for easy-to-use digital marketing and e-commerce software. That demand wasn't being met by HubSpot, which primarily helps small businesses trying to sell to other businesses. Online business owners looking to sell products directly to customers had to look for help elsewhere — Best-case scenario, they had a family member with a background in engineering, like Jabbawy, who could answer questions about building websites and Google Ads.
"There are companies like Shopify that let you create your online store, but there was nobody like HubSpot that was building specific tools for e-commerce businesses to build better marketing campaign," said Jabbawy.
The "nobody like HubSpot" business opportunity remained vacant until 2016, when Privy launched. Over this year, the company has grown from ten to 30 employees. Thanks to the latest financing, the company is planning to double the headcount to 60 by the end of 2019. To accommodate such growth, Privy - now based on Kingston St. - will be moving to a new office in the Leather District in December this year.
Recruiting more employees in software developing, sales, marketing and customer success is not the only way they'll spend the money, Jabbawy said. The company will also add tutorial and training resources to its platform, which was perfected by adding more functionalities over the last three years.
In its latest version, the Privy software allows business owners to build online promotions, coupon codes, reminders to customers to complete checkout and lists of suggested purchases—no coding skills required.
In fact, the name "Privy" was chosen to inspire customers that they could do these things for themselves. The slang meaning of 'privy' ('a toilet located in a small shed outside a house') is not a concern for Jabbawy, he said, as the company has customers all over the world.
Among Privy's customers, there are The Ellen Shop, Ellen Degeneres’ official online store (her team has been using Privy to sell merchandise over the last two years), and The Beatles Shop. When they sign up, customers can start using a free version of the software that is not a free trial, Jabbawy pointed out. Customers can use the pre-plan forever, and upgrade to one of the subscription-based plans when they grow their business.
Monthly fees for using the platform vary from $24 to $299. On average, customers switch to a payment-based plan after one month on the pre-plan, Jabbawy said.
Jabbawy declined to share revenue information, but noted that revenue has been growing 100% over the last three years.
Previous investors in Privy include Mike Volpe, former CMO of HubSpot and current CEO of Lola, and Tuhaye Venture Partner, one of the backers of local esport coaching platform Gamer Sensei.
