Chinese ecommerce giant Alibaba wants to use location data to improve how it sells products. It didn’t want to build the tech itself, so Alibaba hired PlaceIQ to make sense of its massive reams of customer data.
That’s not all. Alibaba also invested an undisclosed amount in the $25 million Series D round PlaceIQ closed in January.
“They do not do nonstrategic investments, and they find that deals are more successful when they come in and invest in the company” said PlaceIQ CEO Duncan McCall.
The investment was separate from the software deal, McCall said. Alibaba uses PlaceIQ’s software, and Alibaba’s data remains behind a firewall. Alibaba can then use PlaceIQ to ingest all its data, clean it and make it actionable.
Even though Alibaba focuses on ecommerce, behavior like visits to restaurants, fast-food places or competing shops can also inform online marketing. Other behavior tied to location, such as flying internationally, might mean the customer will be in market for upgraded luggage or other products.
“Location-based behavioral signals add to their ability to understand what drives ecommerce,” McCall said.
Alibaba also sells advertising and owns the Chinese equivalents of Twitter and YouTube, McCall noted, so it can use PlaceIQ’s technology on behalf of other advertisers. PlaceIQ can measure store visits after ad exposure, for example.
Alibaba and PlaceIQ are in the midst of integrating technology. The core PlaceIQ tech works nearly identically in the United States and internationally, due to smartphones being a “universal construct,” McCall said.
Alibaba and PlaceIQ have discussed potential product improvements, some of which are part of a multiyear road map, while others can be done immediately.
The deal gives PlaceIQ massive scale – and a material amount of revenue. The platform measures about 100 million customers in the US “really, really well,” McCall said, but Alibaba’s customer base dwarfs that.
“Everything is mind-boggling in scale,” he said, because of Alibaba’s massive reach in a country with 1.3 billion people. “It’s 300 million users here, 600 million there.”
