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Clarabridge raises $80 million in private equity

09/10/2013

Analytics firm Clarabridge Inc. announced an enormous $80 million growth round Tuesday, ranking among the largest fundings for a D.C.-area tech company this year.

New investors Summit Partners, General Catalyst Partners, and Unica Corp. founder Yuchun Lee led the round. The proceeds will be used to both fund Clarabridge's expansion and cash out some earlier investors.

The Reston-based company has risen to prominence in a corner of the analytics industry called "customer experience management," or CEM, boasting household-name customers that include Wal-Mart, Bank of America, Best Buy and United Airlines. Clarabridge's core software scoops up unstructured feedback about a brand over a number of channels — social media, market research forums, call center interactions — and then applies text and sentiment analytics to generate useful insights.

Those insights, in turn,"measure the impact of their actions on customer loyalty and profitability," said CEO Sid Banerjee.

Clarabridge's growth round comes just a few months after Arlington-based Applied Predictive Technologies, another analytics vendor, raised $100 million from Goldman Sachs' merchant banking division.

The latest financing "is really a function of our desire to take some of that money and go very, very long," said Banerjee, a former MicroStrategy Inc. executive. He said Clarabridge plans to aggressively expand its 160-strong staff, especially sales teams in the U.S. and U.K., as well "accelerate development of our core product."

The financing also sets the stage for an exit, possibly in the form of an initial public offering.

Lee becomes Clarabridge's chairman under the deal. General Catalyst Partners Managing Director Larry Bohn and Summit Partners Managing Director Tom Jennings are joining the company's board of directors.

Banerjee declined to specify how much of the $80 million round is going directly into the company, and how much is buying back shares from existing investors (nor would he specify who those investors are). Clarabridge had raised about $25 million before now, including $12 million in 2008 from Grotech Ventures, Harbert Venture Partners, Intersouth Partners and Boulder Ventures.

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