Data streams with continual, real-time updates of information are a critical building block of how apps and sites function today, and now a startup that has built a platform to power those data streams is announcing a growth round of funding on the back of strong growth in its business into a wider set of use cases. PubNub, which provides APIs to power messaging and data updates for apps and other digital businesses, has picked up $65 million, a Series E that the San Francisco-based startup will be using to continue expanding the functionality on its platform, as well as for geographical expansion: first up will be a new Asia Pacific office in Singapore.
PubNub tells me that its messaging, presence and other data-based APIs today are used across some 600 million devices in more than 70 countries, with some 900,000 developer projects generating some 21 petabytes of data on a monthly basis. Its "thousands" of customers include the likes of Adobe, Atlassian, DocuSign and RingCentral. More widely, verticals where it is seeing strong traction include gaming, virtual events, enterprise collaboration, chat, rideshare/delivery services, telehealth applications, connected fitness and smart home products -- a range of areas that rely on the concept of "virtual spaces" where regularly updated streams of data -- be it the progress of a delivery, or how many steps you've taken, how much energy you've used, or who is participating or chatting in an online meeting -- are a core part of the user experience.
"We are seeing an explosion in what customers are doing using PubNub," PubNub's CEO and co-founder Todd Greene said in an interview. "From the time we started PubNub the vision was what software is needed to power virtual spaces. At first it was messaging, but over time we saw from customers that communication wasn’t enough."
The funding is being led by Raine Group with others including Sapphire Ventures, Scale Ventures, HPE and Bosch also participating. PubNub is not disclosing its valuation, but for some context, it has raised more than $130 million, and it was estimated by PitchBook to be valued at around $220 million in its last equity round in 2019.
I have confirmed with Greene that the San Francisco-based startup's valuation now is "much higher" than that, although it's hard to quantify PubNub's growth since it has not disclosed how much data it has worked with on a monthly basis, just the number of messages -- 1.3 trillion messages in 2019 -- a figure it's not updating this time around. It says that customer bookings have grown 200% year-over-year in 2021.
PubNub works very much behind the scenes -- you will never see a "powered by PubNub" message come across your screen when its APIs are being used -- but it is also working in what has become a central and critical part of how all digital services operate.
More and more aspects of our day-to-day lives are carried out, or dependent in some way, on digital experiences, and part of the reason why is because those digital experiences themselves have come a long way. Apps, sites and connected devices have more functionality, more data and better user experience built into them than ever before, and so we use (and rely) on them more as a result. Unsurprisingly, those providing the infrastructure to make all that work as it should are seeing a boost of business growth and investor interest.
Added to all that, the "metaverse" has definitely picked up some hype as a concept in recent times, which might also give a push to companies that talk about powering virtual spaces as PubNub does, although the bigger picture is a little less buzzy and just how these services have evolved and operate already.
PubNub is not the only one seeing its star rise in that context. Others like Twilio, SendBird, MessageBird and Sinch also are providing API-based messaging and other communications services used by third-party apps, sites and other digital businesses. More directly competitive with PubNub are others providing API-based routes to build any kind of data updates, messaging or otherwise, that turn the wheels of any real-time services. They include Ably out of London, Techstars-incubated Cometchat and Google's Firebase.
Within that wider context, PubNub's selling points have been its geographical reach with global points of presence, making it compliant with a variety of regional data protection rules including HIPAA, GDPR and SOC 2 Type 2; and the fact that it is adding more functionality, both natively and by way of integrations with other services, all of which it lets developers control and monitor by way of a centralized dashboard. Services that it currently covers include in-app chat, geolocation, virtual events, push notifications and IoT services.
One might think that the current shift in digital culture toward less, not more, notifications overall might prove to be a challenging climate for the likes of PubNub. After all, information overload is not really a contested topic anymore, nor is the concept of apps draining your data or monitoring you all the time whether or not you are using them, even if how best to handle these issues, and whether the overall effects are bad or good, still may be. But Greene says that is not the case.
"Even back when we just did messaging, with the push notification feature, 99% of the messages were in-app. If you are ordering a car and watching it move on the screen, it’s effectively many messages [data pushes] coming to show you that. Companies like Apple and Google aren’t blocking that, so the shift with notifications hasn’t effected us at all," he said, adding, "It has impacted in a positive way. In the past apps may have provided pushes to let you know something has happened. Now, they are not watching that anymore [by default] so now focusing on the in-app experience is more important."
Lead investor Raine Group is an interesting backer for the startup as it continues to grow. The company is not just a prolific investor -- but also counts a very extensive list of customers among those it advises, where it has been involved in a ton of M&A deals involving companies like Apple, Tencent, ByteDance, Warner Music, SoftBank, Uber and more. This opens the door for PubNub to leverage that network for business development and to make more customer inroads.
“We are excited to be partnering with PubNub, powering the future of real-time digital and social experiences in a world where constraints on developer time and engineering resources are placing an increasing demand for software solutions and APIs,” said, Christopher Donini, managing director of The Raine Group, in a statement. “PubNub’s leading solution provides easy-to-implement reliability, security, and low-latency, which we believe solves a pervasive problem at the intersection of Raine’s global network across technology, media, and telecommunications.” Donini and managing partner Kevin Linker are joining PubNub’s board of directors with this round.