Pyramid Analytics on Monday revealed that it secured $120 million in funding, more than doubling the vendor's total venture capital financing to $211 million and setting it up for a potential initial public stock offering.
The funding round was led by H.I.G. Growth Partners, a global investment firm with more than $48 billion of equity capital under management, and included the participation of Clal Insurance Enterprises Holdings, Kingfisher Capital, General Oriental Investments, JVP, Maor Investments, Sequoia Capital and Viola Growth.
As part of the funding agreement, Scott Hilleboe, co-head of H.I.G. Growth Partners, joins Pyramid's board of directors.
The funding round was the fifth for the analytics vendor -- its Series E round -- and marked a significant increase from Pyramid's Series D round in February 2020 when it raised $25 million and its Series C round in December 2018 when it raised $13 million.
That increase, meanwhile, shows the capital markets' recognition that Pyramid has made advancements over the past few years and its analytics platform is in line with what customers expect, according to Omri Kohl, Pyramid's co-founder and CEO.
"This funding round, first and foremost, is a credit to the fact that we got there," he said. "We got to a point where all the engines are firing."
Mike Leone, an analyst at Enterprise Strategy Group, said the leap in the value of Pyramid's funding is symbolic of the capital markets' understanding that Pyramid's focus on decision intelligence meets the analytics needs of users.
"There are several use cases within BI, whether general analytics and reporting, visual self-service, embedded analytics capabilities or augmented analytics, [and] Pyramid, through their decision intelligence platform, can provide a unified approach to satisfying all of these use cases while setting organizations up for success in their quest for broader end-user adoption within the business," he said.
Eyes on an IPO
Pyramid, founded in 2009 and based in Amsterdam -- with offices in London; New York City; Seattle; Boise, Idaho; and Tel Aviv, Israel -- offers an end-to-end analytics platform that enables what the vendor terms decision intelligence.
While business intelligence is the process of accumulating and analyzing data to inform decisions, decision intelligence builds on BI by adding augmented analytics capabilities and automatically delivering data and insights to users within their workflows.
In addition to its focus on decision intelligence, Pyramid is also staunchly independent.
As some other vendors have been acquired as they've grown -- for example, Looker by Google and Tableau by Salesforce, both in June 2019 -- Kohl has repeatedly said that Pyramid wants to remain in control of its own destiny.
And the influx of capital will enable Pyramid to do just that as it prepares for a potential IPO, according to Kohl.
Omri KohlCo-founder and CEO, Pyramid Analytics
"[The funding] is a big statement behind saying that we're staying independent," he said. "And it's going to help us … build the company for an IPO. We don't consider an IPO a liquidation event. We consider it as repeating the statement that we need to and should stay an independent vendor."
Regarding the timing of a potential IPO, Kohl added that nothing is imminent, and tentative plans are to take Pyramid public by 2025 and as early as late 2024.
While the current volatile state of the stock market, which has brought any potential IPOs to a standstill, is one reason to wait, so too is Pyramid's positioning.
Although the vendor's platform has received positive reviews from research and consulting firms such as Gartner, 451 Research and the Germany-based Business Application Research Center, Kohl wants Pyramid to establish a stronger customer base.
"We look at customer adoption, and the type of customer adoption we need to have in order to eventually convince the public market that we're a viable, independent vendor," Kohl said. "We want to have a significant customer portfolio that within the decision intelligence category that we're carving out within the analytics space."
He added that there are key performance indicators and financial milestones Pyramid will need to reach before going public, but those will essentially be a reflection of attracting customers that choose Pyramid as their sole analytics platform as more organizations standardize their end-to-end analytics operation with a single vendor.
Kohl noted that organizations use single platforms for their CRM and ERP needs and predicted they will soon do the same for analytics rather than use different tools from different vendors for different analytics tasks.
"We're good for organizations that have [employees with] multiple skill levels around the table and everyone wanting to participate in analytics," he said. "Organizations that have complex data and analytics requirements and want to scale their analytics experience [to more users] are the ones we serve best."
Pyramid will also use the $120 million in funding to spur growth.
Specifically, the vendor will use the money to invest in product development, seek to double the company's size over the next two years from about 250 employees to around 500, and expand into new markets while strengthening its position in existing markets, according to Kohl.
"We have a very extensive roadmap around continuing to build the infrastructure behind decision intelligence," he said.
In particular, Pyramid is adding machine learning capabilities that better enable customers to automate analytics processes.
Pyramid already has strong AI and machine learning capabilities that serve as a differentiator for the vendor, and continuing to invest in augmented analytics will further help Pyramid stand out against other vendors, according to Leone.
"Their biggest differentiator is their augmented analytics capabilities," he said. "This is the top area driving BI modernization and expansion right now, and Pyramid is a leader here. With this funding, you can bet they will not be resting on their laurels here."
Pyramid is also looking to cater to a wider array of business personas, Kohl said, adding that its platform currently serves the needs of about two-thirds of potential analytics users, but by adding more automation it wants to enable more users.
"The idea is to add more and more automation," he said. "A lot of people call it AI, but I think automation is the more appropriate way to describe it. It's a way for people with no analytics background to still use sophisticated tools to gain insights into their business. That's the way to scale the analytics experience across the board."
Meanwhile, that focus on automation has the potential to improve Pyramid's customer experience, according to Leone.
"Pyramid has always been about empowering anyone, from the C-level to generalists looking to bring data to every decision," he said. "The focus on customer experience will go a long way in ensuring they deliver on their empowerment value proposition."
With respect to geographic expansion, Kohl said Pyramid's Series E funding will enable the vendor to move into the Asia-Pacific region while building upon its existing presence in Europe and adding new partners.
Beyond what the $120 million will enable Pyramid to add to its analytics platform and the growth it expects to spur, it could also enable the vendor to add capabilities and expert personnel through acquisitions.
Sisense, another independent analytics vendor, was in a similar position after raising $80 million in late 2018 to bring its total funding to about $175 million (it has since raised another $100 million), and in May 2019 added data science capabilities with the acquisition of Periscope Data.
Pyramid has no specific plans to make an acquisition, according to Kohl. But he acknowledged that if the right opportunity presented itself, the vendor is in position to make a move.
"In our current plans, we feel we have the R&D capacity to execute our roadmap," Kohl said. "However, never say never. There are lots of amazing technologies out there that if they could shorten our time-to-market, it would make sense."
He added that should Pyramid want to undertake a special project -- such as an acquisition -- it has agreements with its existing investors to draw more capital.
"If there were an opportunity with something that would help accelerate [our plan], we have the means and the resources to do it," Kohl said.
Enterprise Strategy Group is a division of TechTarget.