Algolia pitch deck to raise $150m Series-D round -

This is the Algolia pitch deck to raise a $150m series-d round in 2021.

About

Algolia is the search-as-a-service platform that enables companies of all sizes to deliver fast and relevant digital experiences that drive real results. With Algolia, consumers are able to easily find and discover what they want across the web, mobile, and voice. Algolia allows developers and business teams to build and optimize delightful Search & Discovery experiences that increase online engagement, conversion rates, and revenue.

Search software and API startup Algolia has been through a year of change: CEO Bernadette Nixon replaced previous chief executive and Algolia cofounder Nicolas Dessaigne during the pandemic last May, and quickly brought on seven new executives to help the company scale.

Today, the nine-year-old San Francisco-based startup announced a $150 million Series D round at a $2.25 billion valuation — quadruple what it was at the time of its Series C funding in October 2019, the company says. The round brings Algolia’s total funding to $315 million and will help it compete against its big, public-company rivals Amazon Web Services and Elastic.

Nixon told Insider her new executive team has been the “secret sauce” for company successes such as the launch of a new recommendation product and the acquisition of MorphL, an artificial intelligence startup it bought for an undisclosed amount in January.

Algolia also moved from a subscription-based pricing model to a usage-based one this past year, which Nixon says customers welcomed: “If you want to start small, you can absolutely start small,” she said.

The startup’s change is part of a larger shift within the software industry toward usage-based models, where companies charge customers based on their exact usage of products or services, instead of via a recurring subscription.

Also this past year, Algolia rolled out a new enterprise sales strategy that Nixon says helped it land bigger customers.

“The makeup of the business has shifted quite significantly,” she told Insider. “We still cater to the small business, but we also flex now very nicely up into the enterprise.”

Selling to larger companies also meant bringing on a new chief customer officer and head of partnerships, removing the paywall for customer education materials, and rapidly hiring a new sales team, Nixon said.

But going after larger enterprise customers also means competing with cloud giant Amazon Web Services and $13 billion Elastic, creator of the Elasticsearch software.

AWS’s search product is based on Elasticsearch, and the two firms have fought over Amazon’s profiting from Elastic’s open source software. Algolia, however, is immune from those legal battles because its own software is proprietary, Nixon says.

“Elastic has been in battle with lawsuits with AWS because they took the open source version, put it on AWS. We have our own IP,” Nixon said. “So that is a significant competitive moat.”

With this latest infusion of cash, Nixon says the 490-employee startup will invest in product and customer support, and expand into new regions like Germany, Japan, Singapore, and Australia.

Meanwhile, the growth of cloud-based services and software during the pandemic has been a boon for the startup, too — and Nixon is optimistic that will endure.

“Those people that weren’t focused on digital transformation and knew they should be, they actually started and took the plunge,” Nixon said. “In many ways, the ten years of progress that we made in the space of three or five months has been very good for business, and will only continue.”

Algolia’s latest round was led by Greenwich, Connecticut-based Lone Pine Capital, and included participation from Fidelity Management & Research Company, STEADFAST Capital Ventures, Glynn Capital, and Twilio. Existing investors Accel, Salesforce Ventures, DAG, Owl Rock and World Innovation Lab also provided funding.

Funding rounds

Announced Date	Transaction Name	Number of Investors	Money Raised	Lead Investors
Jul 28, 2021	Series D – Algolia	10	$150M	Lone Pine Capital
Oct 15, 2019	Series C – Algolia	10	$110M	Accel
September 1, 2017	Secondary Market – Algolia	1	—	Aglaé Ventures
Jun 7, 2017	Series B – Algolia	10	$53M	Accel
May 20, 2015	Series A – Algolia	9	$18.3M	Accel
Jun 19, 2014	Seed Round – Algolia	8	$1.3M	Storm Ventures
Apr 24, 2014	Seed Round – Algolia	1	—	—
Mar 25, 2014	Pre-Seed Round – Algolia	2	$120K	—
Oct 1, 2013	Seed Round – Algolia	7	$1.5M	—

Pitch deck review summary

Algolia Pitch Deck

Structured summary review

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Slides

Slide by slide review

The cover slide is bizarre. It’s the first time I have ever seen the company name or logo not there.

The font size used is obnoxiously large. It’s presenting on stage size.

There is no need to write this is confidential on a slide, and then to keep repeating it on every slide.

This deck was published online so I can only guess they added this slide as some kind of marketing BS? I have no clue why they would write this in their actual deck??

This is sort of a weird summary slide. Normally if you stick a summary at the front you stick to traction points. Why are they talking about 3 major trends here?

Algolia is to search is a weird claim. I’m pretty sure Google is to search.

Search for developers? I have no idea what that means. What like on site search? Like Elasticsearch?

If you are going to take a slide to explain yourself, at least do it well.

This deck is weird. Why do they have a few slides with really large text and just a sentence?

Ok, they can make a claim, but they need to actually prove the point with some data.

These guys raised $150m and they’re proving that developers like them with quotes? Quotes are lame.

Developers on the platform is useful, however, it’s a misleading statement. Does this include all the people that signed up just to have a look and never logged in again?

I would delete all the quotes and find another chart to support what they are saying.

They have this whole thing about search but they haven’t explained WTF that means. Two slides later (there are no page numbers) they start explaining search. Um, wouldn’t it make sense to introduce search before they start claiming they are the best at it? Ordering matters.

This deck is annoying me. I mean ‘sustaining differentiation’ how?

Corporate word soup! I love playing that game! What the heck is a Composable Enterprise?

I mean they reference that Jeffy boy talks about this stuff in his book, so it must be important! Did yer one just read a book with some fancy terms and chuck them on a slide with some smug satisfaction? If I was investing 150m I would rather hope that you are the one writing the book (if you had time).

Why isn’t this effectively the first slide?

Also, their definition of search is a bit broad and peculiar. It’s solid to use an image and reference points, but they need to make sense.

These are lame case studies for an investor deck. I really wonder if this is actually a marketing deck and they have called it an investor deck in order for people to take notice of them?

If you want to do a case study, actually do one. What were they doing before and how much better is it quantifiably now?

This is a dumpster fire of a slide. There is no way they used this in a real pitch deck.

Another crappy pointless slide.

You don’t really want more than 3 people on a slide if they are the people that investors are investing in. You do a slide like this if you are mainly raising from existing investors and are adding a team slide just because.

If you are later stage it is frankly fine to have 3 team slides. To be honest, the rules for later stage are a little different.

Yeah, if I’m throwing 150m at you what I really care is that the team is diverse…

I’m super confused about how they are adding a co-founder CTO at Series-D? That’s just bizarre.

This is the sort of slide that I expect to see from a seed-stage company (but obviously the expectations are lower and you aren’t getting 7 execs).

Come on… how much of this is actually attributable to algolia… AllTrails increased their registered users 2x over FOUR YEARS and algolia is taking credit for all of it?

This deck is pretty dumb,.

Super lazy market sizing. This again is something I would expect to see in a seed stage deck. 2021 is 14 billion. 14b what? If you are doing a page like this, is that then the TAM, SAM or SOM?

I think this slide just says they have three products? If that’s true, there are far simpler ways of saying so.

Don’t write nonce things like “designed to be blazing fast, scalable and highly available”. Just explain how it is and let investors decide for themselves.

You absolutely should have a seperate business model and GTM slide. And holy flark batman, this is pathetic for the stage that they are at. I really doubt this is actually their pitch deck.

Don’t write thank you on a slide at the end. It’s pointless (just like this deck).

What do you think about the deck? What’s your favorite part of it?

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Algolia pitch deck to raise $150m Series-D round