After its recent funding round which closed at $248 million, ThoughtSpot has become the fastest-growing analytics firm with a unicorn valuation of $1.95 billion. The company has received over half a billion in funding rounds alone spanning across five funding rounds in the last seven years. Founded in 2012, the company’s growth in funding has been astounding, proving that investors see a lot of value in it.
The company has been doing well in terms of customer acquisition as well with more than half of the Fortune 10 and companies like Walmart, Hulu, Daimler, 7Eleven, PetCo, and Rolls Royce using its data analytics solutions. The company also has an average sale price of $250,000, contributing to sales growing 195% in the first half of the fiscal year.
What Value Does ThoughtSpot Create To Justify Such Funding
ThoughtSpot’s feature of a natural language processing interface can help users with complex questions and augmented intelligence, and this has helped it shine when compared to others. The offering has two different things happening at the same time in its dashboard. One is a simple search engine that uses machine learning to answer enterprise-specific questions, and the second is using AI to automate the process of analytics. This way businesses can perform a simple Google-like search in natural language to quickly analyse billions of rows of data, and use artificial intelligence to get relevant insights. Search capabilities can power users to find answers to their queries, while artificial intelligence enables insights on queries business may not be aware, based on patterns in search history, data anomalies and other trends.
One example based on such search queries is how bankers can instantly search which types of loans have a higher default rate, or a phone retail firm that can search which age demographic buys the most number of iPhones from the firm. The advantage of such search-based analytics is that it does not require any extra expertise, and all users can contribute to enhancing business intelligence. Analysts say the technology is as an evolution that goes beyond what the technology offered by a leading analytics player Tableau, which was acquired for $15.7 billion by Salesforce in June 2019.
Combining Search Analytics With AI
ThoughtSpot’s technology is defined by experts as augmented analytics that is supported by huge scale AI-driven machine learning and enterprise-grade search engine-like capabilities. This is a unique value proposition that a company brings to business intelligence space, where there is usually no focus on ‘search’ option for enterprises. Tableau and PowerBI include search-driven analytics but are only limited or included as a side feature. Compared to ThoughtSpot, experts have also called Tableau and PowerBi as “legacy” business intelligence tools which are based on report builders and report viewers.
Most business intelligence applications are built using point-and-click drag-and-drop graphical user interfaces, yet still need the end user training and long set up times. It is estimated that only a small percentage enterprise decision-makers leverage data analytics directly as they are not trained in the area, and have to depend on trained analysts for business intelligence. This is a challenge for wider adoption of business intelligence among varying levels of business users.
Adding Capabilities With Strategic Partnerships
In the last year or so, we have seen a lot of business intelligence software vendors improve their capabilities with mergers and acquisitions. For example, Tableau recently agreed to be acquired by Salesforce so it can compete with Microsoft Power BI whereas Qlik acquired data management vendors Podium Data and Attunity in the last one year. The story does not end here as Looker made a deal to be acquired by Google, Sisense agreed to merge business with Periscope Data, and Alteryx made a deal to buy ClearStory. For ThoughSpot, it has enhanced its technology offerings with strategic partnerships. Since the end of 2018, ThoughtSpot has partnered with Google Cloud, DataRobot, Alteryx, Snowflake, Carahsoft and Dell to build the same level of product features others have achieved through mergers and acquisitions, particularly capabilities that relate to cloud.
ThoughtSpot’s yet another funding round, which pushed its value to almost 2 billion, shows that investors are happy to write big checks for new innovation in BI such as AI and search-driven analytics. It is also a sign how new data capabilities are transforming traditional analytics workflows, riding the gap between trained and untrained employees to contribute to business intelligence. Of course, the integration of AI and machine learning is propelling this evolution too, and we may see stiff competition among all the leading BI vendors in this direction in the coming future.
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The large funding of ThoughtSpot is showcasing that with the amount of data businesses are collecting from IoT, cloud, SaaS, business users dealing merely with charts and dashboards will not be enough and there has to be AI and natural language search involved. No wonder, ThoughSpot reached unicorn status in such a short span of time.
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Vishal Chawla is a senior tech journalist at Analytics India Magazine and writes about AI, data analytics, cybersecurity, cloud computing, and blockchain. Vishal also hosts AIM's video podcast called Simulated Reality- featuring tech leaders, AI experts, and innovative startups of India.