Problem: Recently, the concept of heat map tracking on a per-page level has caught my attention. While talking to friends making their own startups or friends working in tech generally, I’ve heard that two major tools dominate the space: HotJar and Clarity. Both offer similar tools such as heatmaps, recordings, surveys, feedback, interviews, along with Google Analytics integrations.
Is there an opportunity for innovation in this space?
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Solution: In playing around with HotJar and Clarity, I’ve been blown away. These website collect insane amounts of data including which pages users look at, where they click, how long they stay on a page, and more. Moreover, you can create personalities that track users across visits just based on the IP address. Its more data I’ve wanted for usage of my websites or mobile apps. But even then, just having data is only one part of the equation: how should a business owner actually analyze and use this in order to create meaningful business change?
This business would focus on deep-analytics by stringing together tools like HotJar or Clarity with traditional IP-address logs, activity logs, Google Analytics, payment analytics, Google Adsense, and more in order to answer significantly difficult questions that HotJar or Clarity can’t answer today. For instance:
What pages lead most to others?
Which pages tend to create the most ended sessions?
How are users entering my site?
How many clicks on a page correspond to purchasing a product?
If your curious to learn more about the two different alternatives, I’d highly recommend this video:
Monetization: In September 2021, Contentsquare acquired HotJar. While I couldn’t find the specific acquisition amount, VentureBeat described that
this acquisition comes just a few months after Contentsquare secured $500 million in funding at a $2.8 billion valuation and follows a flurry of activity in the space. Quantum Metric closed a $200 million tranche of funding at a $1 billion valuation, while just last month Full Story locked down $100 million at a $1.8 billion valuation. Yesterday, Amplitude revealed a 57% growth in revenue as it prepares to go public on the Nasdaq.
More recently, in August 2022 Contentsquare, Hotjar’s parent company, raised $600 million in a Series F investment round.
Our Series F investment follows on from a $500 million Series E round in May 2021. This latest round is led by the growth investing platform of global investment firm Sixth Street, which joins new and existing investors Bpifrance, Canaan, Eurazeo, Highland Europe, KKR, LionTree, SoftBank Vision Fund 2, and funds and accounts managed by BlackRock.
This brings Contentsquare’s latest valuation to $5.6 billion.
If a company that simply collects and provides data with very little data analytics can be valued at $5.6 billion, I would venture to guess that a full company which also does the analytics could be valued at significantly more.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)