Attensity, founded in 2000, was early to market with text analytics solutions. The company’s “exhaustive extraction” capabilities, referring to the use of computational linguistics to identify entities and relationships in “unstructured” text, set a standard for commercial natural language processing (NLP). Rival Clarabridge, as a start-up, even licensed Attensity’s technology. Yet Attensity has struggled in recent years, reaching a possible low point with 2013’s less-than-a-year tenure of Kirsten Bay as CEO. And now, under Howard Lau, chairman (since early 2013) and CEO (with Bay’s December 2013 departure), and with $90 million in equity financing?
I would characterize the May 14, 2014 financing announcement as a doubling down, in both investment and technical positioning.
Attensity is worth a re-look, hence this article with a financial focus and another on positioning points that I’ll post soon. I hope to follow them in the fall with a look at innovations and the product roadmap.
A Doubling Down?
All Attensity will say about the $90 million transaction is that “Financing was provided by an international private equity fund and financial advisor company. The new capital secured will be used to accelerate product innovation; fuel market growth; and expand the sales, marketing, and engineering teams to meet the growing need for engagement and analytic applications using patented natural language processing (NLP) technology.”
I tried and failed to learn more. Marketing head Angela Ausman, who joined the company in April, declined to comment on questions I posed to her and CEO Howard Lau, regarding market positioning and growth markets, the competitive landscape, alliances, and the product roadmap. Lau has been unavailable for discussions.
“The company says it previously raised about $58 million,” according to May reporting in the San Francisco Business Times, and Attensity-acquired company Biz360 had itself raised about $50 million. I’m guessing the $58 million figure includes only investment in Attensity in its current form, that it discounts funding prior to 2009, the year Aeris Capital bought Attensity. Attensity no longer lists investors or much history on the company Web site. Early investors, surely since bought out, include In-Q-Tel, which led a 2002 $6 million round. I’d speculate that early owners did not fully recoup their investments.
Turn-arounds are tough.
I don’t know whether former CEO Kirsten Bay, who held the post from January to September 2013, chose to leave or was pushed out. Regardless, she may not necessarily have failed so much as not sufficiently succeeded, by her own or Attensity’s standards. When a company is losing customers, talent, and money (in order of importance) only radical restructuring or an asset sale will save the day.
My take is that Attensity’s troubles started under the longtime executive managers who preceded Bay. An industry-analyst friend offers the comment, “By the time they took Aeris money Attensity was already a dead enterprise. The money and support gave them a Death 2.0 runway.”
Attensity used the Aeris money to attempt to go big but was unable to make a go of the 2009 roll-up of Attensity and two German companies, Empolis and Living-e. Buying Biz360 in 2010 in order to get into social intelligence was a mistake. Social intelligence was at the time, and largely still is, a low-value, small(ish)-deal proposition that doesn’t pay unless you’re set up to do mass marketing, which Attensity wasn’t and isn’t. Attensity Respond goes beyond social intelligence to provide engagement capabilities.
I wonder whether the 2010 deal for real-time access to Twitter’s “firehose” has paid off, or will ever.
Also, Attensity had a failed foray in advanced analytics (data science), which probably wasted attention and opportunity more than it wasted money, but still a loss ill-afforded by the company. (Clarabridge pursued a similar predictive analytics initiative around the same time, in 2010 or so, working with open-source RapidMiner software, but didn’t invest much in the effort.)
So Attensity unrolled the 2009 roll-up, in particular shedding European professional services, but has maintained social listening (Pipeline) and engagement (Respond) capabilities, complemented by Attensity Analyze for multi-channel customer analytics. (I plan to write in another article about a new product, Attensity Q, and perhaps also about product technical underpinnings.)
Get On Up
Attensity business performance has seemingly been stagnant in recent years. The company has lost customers to rivals with no recent new wins that I know of. Attensity shed most senior staff. Everyone I knew personally at the company left within the last couple of years. Beth Beld, the chief marketing officer whom Kirsten Bay brought on in May 2013, stayed less than five months.
I do know that Bay met with potential Attensity acquirers, including two of my consulting clients, but none of them, evidently, saw promise sufficient to justify terms. If Dow Jones reporter Deborah Gage is correct, that the new funding comes from Aeris Capital AG, already Attensity majority owner, then the $90 million transaction truly does represent a doubling down, in a game with no other players.
The May funding announcement was a plus — call it a take-over from within — and I did receive a positive comment from a consultant friend: “We’re working with one of the Top 10 banks in the U.S. and they are migrating new lines of business from other tools over to Attensity.” Good new, but for Attensity to revive, we’re going to have to hear a whole lot more.
Disclosure: Attensity sponsored 3 instances of a conference I organize, the Sentiment Analysis Symposium, most recently in the fall of 2012, and the company was a 2011 sponsor of my text analytics market study. A new version of that study is out, by the way, Text Analytics 2014, available for free download.