Estimote Raises $10M First Round As Proximity Marketers Tap VCs
Is location a hot new investment? Or are beacon brands like Estimote scrambling to get capital before it dries up?
As Wall Street concluded another week of sell-offs with the Dow Jones Industrial Average plummeting another 391 points, proximity marketing providers cashed in a collective $100 million in venture capital money, as beacon platform Estimote said it had raised $10.7 million in a first round funding.
The news comes a day after three other location-based marketing and analytics platforms separately revealed that they had scored venture capital rounds as well: place-based discovery app developer Foursquare ($45 million), location analytics platform Euclid ($20 million), and geo-data PlaceIQ ($25 million).
Estimote declined to comment for this story, but its blog post heralding its capital infusion hints at its plans to become “more than a beacon provider” and become a fuller “micro-location tech stack.”
“Our main message today is that Estimote is not a beacon company; we’re a full stack location intelligence company building beacon and sensor hardware,” Steve Cheney, Estimote’s co-founder and SVP of business and operations told GeoMarketing back in September. “And we’ve successively brought together very disparate products — beacon hardware, cloud software, on-device device SDKs and smart data science — to make a platform for location intelligence and context.”
Like its closest rivals, such as Swirl Networks and Gimbal, Estimote expects beacons and other sensors to become a permanent fixture in retail marketing, as businesses continue to look for ways to personalize and connect the in-store experience to consumers’ digital channels through proximity-based communications. But as beacon hardware gets tinier, less costly, and more mainstream, the challenge of differentiation will be felt more sharply.
While there are hundreds of companies listed in the Proxbook directory of proximity solutions providers, there will surely be consolidation over the next two years. The companies that have the headstart on developing the next phase of location-based ad tools stand the best chance of sticking around.
And Estimote has achieved a good deal of success since it was founded by two Polish university students Jakub Krzych and Łukasz Kostka, the company’s CEO and chief technology officer, respectively, in March 2012.
“Over the past two years more than 50,000 developers representing the world’s best agencies, Fortune 500 companies, and startups have used our products and software stack to rapidly innovate inside their real-world businesses,” the company said in its blog post on Friday.
Although the company remains mum on the subject, Estimote’s “diamond-in-the-rough” shaped beacons have been spotted in Target stores as part of the chain’s proximity marketing rollout last August (something Techcrunch’s Sarah Perez notes in her piece about the New York company’s funding round).
Among its more high-profile use cases, in the fall of 2014, the Guggenheim Museum in New York began testing Estimote’s beacons to enhance art lovers’ visits, which included giving them more information about the works on display right to their phones as well as making it easy to find exhibits they wanted to see.
As for what’s next for Estimote, Cheney tells Techcrunch that the company is continuing to look “beyond beacons,” or at least the most common marketing use cases.
“If this technology was just used for push notifications, and just for coupons, we would have never started this company,” he tells Techcrunch. “Marketers who talk about coupons… it just makes me tired.”
While the funding Estimote and the other location platforms received this week was locked in before this week’s stock market swings, it does point to the value that investors believe exists among them and the demand from retail and other businesses.
But with weakness on Main Street as well as Wall Street, as evidenced by poor December consumer spending and Walmart’s store closings, it’s safe to say that the coming months may also see venture capitalists pulling back as well. As such, that proximity consolidation that we mentioned above? It could come sooner rather than later.