First there were data management platforms, then there were customer data platforms. Now there are “composable customer data platforms.”
On Tuesday, Simon Data, a self-described composable CDP, announced a $54 million Series D round, bringing its total funding to roughly $118 million since 2014. The round was led by Macquarie Capital, with participation from a roster of existing investors, including Polaris, .406 and F-Prime.
But … what is a composable CDP?
Cloud crowd
Whereas some CDPs store copies of data to do identity resolution, composable CDPs are natively designed to integrate with data cloud warehouses, like Snowflake, AWS, Databricks or Google’s BigQuery, said Jason Davis, CEO and co-founder of Simon Data.
Other CDPs, including ActionIQ, mParticle, Lytics and Blueshift, also frame themselves as “composable” and use the designation as a differentiator from CDPs that don’t take a so-called “warehouse-first” approach.
“Users can access all of the data housed in their cloud infrastructure without having to replicate or move the data unnecessarily,” Davis said. “Anytime you ship data outside of a secure, permissioned environment, you expose yourself and your customers to a real security risk.”
A large enterprise company may store its data in dozens, hundreds or even thousands of different databases. A cloud-based platform unifies those disparate sources in one centralized location so marketers can more easily plan and attribute cross-channel media.
Simon Data has integrations with multiple cloud data warehouses, including Amazon Redshift, BigQuery and Microsoft Azure Synapse, but its closest relationship is with Snowflake, Davis said.
The company’s architecture was built on Snowflake in 2013 (which also happens to be the year that David Raab, founder of the CDP Institute and father of the CDP category, first coined the term).
Although the promise of a CDP has always been that whole “single view of the customer” gambit, without native applications for the cloud, it’s hard to get beyond basic email personalization, Davis said.
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“When people talk about the convergence of mar tech and ad tech and the role a CDP can play, it’s not about optimizing a few channels here and there,” he said. “It’s about the entire customer life cycle and every touch point that a brand has with their customer, from paid to onsite, CRM, direct mail, support and beyond.”
AI (of course)
Simon Data will invest the bulk of its new funding into R&D and product development, including automation and generative AI.
When generative AI is combined with better data access, Davis said, that’s when things really get interesting. For example, a CDP could automatically identify and suggest the best-possible segments for a given campaign.
And marketers shouldn’t have to be data scientists to do cool stuff with customer data, Davis said.
“It shouldn’t take weeks or months for marketers to collaborate with their data teams. Why not minutes or hours?” he said. “The application tier is about removing the friction so that we can bring the application as close as possible to the data.”
That’s the sort of technology that Simon Data wants to build, Davis said. Most of the company’s open roles – the headcount stands at roughly 100 today – are for product engineering and R&D.
That’s not to say M&A is off the table. But if Simon Data buys another vendor, he said, it would likely be an acqui-hire.
“I’m an engineer by trade, so our perspective is generally to build first,” Davis said. “That doesn’t mean we wouldn’t consider buying a great piece of technology if we see it, but [M&A] isn’t central to our strategy.”
