What is Sprinklr Getting From Dachis Group Acquisition?

Two things:

1. To stay competitive with (or arguably ahead of) the giants in the social world—Salesforce, Adobe, and Oracle—Sprinklr needed to build out its analytics capabilities. While Dachis started as a services company, they’ve been more focused on software for measuring, benchmarking, and optimizing social efforts since the beginning of 2012. In a call about the acquisition with Sprinklr CEO Ragy Thomas, he said:

This was a client-driven acquisition. We built an inside-out platform and the big hole for us was the outside-in perspective. What Dachis did that was interesting for us is building a brand analytics platform. This was not just social analytics, but brand analytics—brand perception, brand love, brand mindshare, brand advocacy. This is the first brand assessment framework. Now we’re able to provide an outside-in view.

Hootsuite bought UberVU last month, also in large part to build out its enterprise analytics capabilities (that was a much smaller acquisition). However, where Hootsuite is looking to gain paying enterprise customers, Sprinklr has focused on them from day one. In fact, Sprinklr and Dachis already serve many of the same large brands.

2. Sprinklr’s customers increasingly need custom consulting services, especially for implementation and training. This is a new tool and new processes being introduced often to hundreds or even thousands of people in large, distributed organizations. Sprinklr doesn’t want to get into consulting, but Dachis was more of a consulting blend and can enable agency and consulting partners, like the Accenture’s of the world, to more effectively provide the right services. Thomas compared Sprinklr with SAP at the advent of ERP:

“Our ability to grow depends on more than software—we want to enable the partner ecosystem. It’s growing like crazy already, and we need to train those organizations.”

He said that growth plans called for hiring 60-90 people in short order, which this acquisition also gets them. At the end of 2012 it was clear the “giants” were entering the space, and Sprinklr had two plays: 1. Be acquired, or 2. Grow quickly. The latter included raising money for hires and almost certainly making acquisitions; clearly that’s the way they’ve gone.

Sprinklr raised two rounds last year, totaling $32.5M, has invested in growth, and has now made a sizeable acquisition. That said, Sprinklr’s approach has been ground-up, and even this acquisition will not entail the kind of integration of overlapping features that Salesforce and Oracle in particular are working through. Together, Sprinklr and Dachis have raised $95M.

Thomas expects this to be the most strategic software brands have behind the firewall in three years. From an internal point of view, managing the social relationship is a seismic shift that requires significant organizational change—and the right platform to manage it. If Sprinklr can monopolize the social relationship it will almost certainly pave the way for an IPO in the next few years.

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