This week, RapidMiner announced that it has raised a $15 million Series B round of capital. The company had previously raised a total of $5 million, bringing its total capital tally to $20 million. The round was co-led by Ascent Venture Partners and Longworth Venture Partners.
RapidMiner, headquartered in Cambridge, Mass., provides what it describes as “code-free” analytics tools. The company’s tools can be used for model fitting, predictive analysis and churn modeling, among other tools. Churn modeling, of course, is particularly useful for companies that sell their services on a subscription basis — SaaS, et al. — that want to know who among their customers might be the most likely to churn, and what actions they might take to mitigate the possibility.
I spoke to RapidMiner’s President and COO Michele Chambers about her company, which she described as trying to help people “extract value from big data.” Big data is a now-ubiquitous term that has come to encompass every massive data set, which raises the question of what to do with mountains of information once you have it all piled in one place. RapidMiner wants to provide companies with the tools they need to peer into their data and not have it peer back. And since big data is hardly going away, I would wager that RapidMiner’s total addressable market is growing, as well.
As a company, RapidMiner long developed its tools in an open-source fashion. In November 2013, however, the same month it announced its first $5 million in outside capital, the company moved to a ‘business source’ model. In business source, an active community of third-party developers and users can tinker with the code as with open source, but the most recent version of the product is reserved for paying customers. All subsequent versions of RapidMiner, the company noted at the time of its switch to business source, are “available under an OSI-certified open source license.”
To see the company decide to derive more revenue from its product — which is hardly a sin — at the same time of its first external capital infusion is not surprising. The effect? RapidMiner claims, via an emailed press release detailing its funding event, to have “tripled [its] product revenues” over the last 12 months. It’s been about 15 months since the company moved to business source, but at least from a revenue perspective, the decision seems to be bearing out well so far.
Now with three times its previous capital raise, it will be interesting to see if RapidMiner can pull off another tripling in a 12-month period.