SessionStack, the Bulgarian startup that develops а Digital Experience Insights platform to help product teams improve customer experience, closed a €750К seed round led by the Sofia-based BrightCap Ventures.
The round was joined by Boyko Iaramov, angel investor and co-founder of Telerik and Campus X, and will be used to drive more sales, fuel more marketing efforts, and product development. As some European funds are still experiencing interest in joining the round, the team of SessionStack is considering extending the round.
The product of SessionStack is used by developers, product managers, customer service experts, and UX designers to decrease the time they spend on understanding and fixing product issues. It allows digital businesses with web applications to get comprehensive and actionable insights into their users’ journey to improve product quality, adoption, and user experience.
“As BrightCap Ventures’ partners come with a software background, we are immediately associated with the problems that SessionStack tackles. We saw a fit with the founders, the team, and the culture. From a market perspective, we expect that in the future such tools and smart insights will not be a luxury but a necessity for the proper digitalization and competitive operation of all business,” Georgi Mitov, Managing Partner at BrightCap Ventures shares.
The problem with understanding the product issues of an app
Founded in 2016 by Alexander Zlatkov and Lachezar Nickolov, SessionStack launched as a solution to the problems that the two co-founders have experienced in their careers as software developers at Telerik and VMware. “Every developer in my team had to dedicate 25-30% of their time to understand and tackle the problems that our clients encountered. This meant that we had to find out which functionalities don’t work, why they don’t work and how we can improve them,” Zlatkov recalls.
The problem that SessionStack solves is not new. Ever since people started to use digital products on a mass scale, developers needed to understand how to effectively iterate and improve the user experience. Up until now, to accomplish this goal product teams have used standard analytics solutions. These tools provide product teams with numerical information such as the number of people who have used a specific functionality.
“Developers and product people have some clarity of what is happening with their product but have no insights about why these things are happening. Moreover, the numerical information that standard analytics solutions provide is used by a limited number of people in the team – product managers or business analysts,” Zlatkov highlights.
He explains that in the past two years, we have seen accelerated adoption of digital products. Many offline businesses such as insurance and healthcare are going online. This means that people now have to learn how to navigate these new digital products. The growing volume of users requires product teams to start serving their clients in a much more effective way.
How does SessionStack bring innovation in product development
“SessionStack is an evolutionary product in the analytics market because besides informing product teams about problems that are happening, we let them see why these problems are happening. They are able to see the whole customer journey, including where users click, what distracts them and makes them convert or quit. Therefore, product managers do not need to run surveys or reach out to individual clients to ask them what went wrong,” Zlatkov explains.
He shares that, in addition, standard old-school solutions require product managers to make hypotheses about the future use of a product and then build it based on the hypothesis. Due to the dynamic nature of the markets for digital products, however, hypotheses turn out to be wrong and developers have to reconfigure products multiple times.
Zlatkov describes the solution of SessionStack as instrumentation-free because once it is integrated, it collects all relevant information and provides product teams with smart insights. “Having so much customer data about what makes a product feature successful or not, we can provide key insights and recommendations about product improvements,” he adds.
SessionStack also differentiates from other digital experience solutions by focusing on data privacy – an area that has become very sensitive in times of increasing digital transformation. Its solution can work both in the cloud and on-premises, being hosted in the data center of the client.
Business model and growth
SessionStack is a B2B SaaS company and makes revenue from monthly and yearly subscription fees based on the traffic generated by applications and the size of the product teams using the SessionStack solution.
For the five years it has been on the market, it has attracted clients such as Bazaarvoice, Sketchdeck, Infomedia, and CalPERS, the California-based pension health fund that is their biggest client. Around 65% of the businesses using SessionStack are based in the US and the rest across Europe and Australia. The team of the startup has already well-validated use cases and confirmed that their offering is not limited to a specific industry, geography, or stage of development.
Before the seed round of BrightCap Ventures and Boyko Iaramov, SessionStack had closed an angel round from two of the other co-founders of Telerik, Hristo Kosev, Boyko Iaramov, and Vassil Terziev, and Pierre Vallet, founder of Proxiad. The startup has also been backed by the European B2B accelerator Startup Wise Guys being the only Bulgarian company in the portfolio of the program.
What comes next for SessionStack
At the moment the team of SessionStack consists of 10 people and it is expected to double in the near months after the financing round. The company will be looking to hire developers, product managers, marketing and sales specialists so that it is able to accomplish its goals for expansion. So far SessionStack has relied on organic growth, and now after the investment, the team will aim to use the capital to increase its marketing presence.
“Being part of a new market for digital experience solutions, we have the vision to become the global leader in digital experience insights. This investment round will kickstart the process and allow us to build upon our current tractions in order to catch the right moment when there is still a gap for such solutions in the European and American markets,” Zlatkov concludes.