Over the last decade, we have welcomed more and more digital services and products into our lives and integrated them into nearly every activity we take part in. Consequently, personalized customer experiences where businesses engage with consumers seamlessly across various platforms and touchpoints have become increasingly important.
Braze is servicing this growing need with its leading customer engagement platform that facilitates interactions between consumers and brands to build and maintain direct, meaningful relationships with their customers. The platform empowers brands to listen to their customers better, understand them more deeply, and act on that understanding in a way that is human and personal. It offers a suite of tools ranging from messaging channels and AI-driven analytics to campaign creation and optimization, all geared towards fostering genuine and timely interactions.
Whether it’s e-commerce giants keen on optimizing shopping experiences, travel agencies wanting to offer timely deals, or fintech firms focusing on personalized financial advice, Braze’s solutions cater to a vast array of use cases. The technology provides brands the flexibility to adapt and engage based on user behaviors, preferences, and real-time data, making it a go-to solution for industries striving for contextual and personalized user interactions.
With a strategy defined by relentless innovation, the company continues its expansion into newer markets, deeper integration capabilities with other tech ecosystems, and a steadfast commitment to enhancing the user experience. Using these focused strategies, Braze aims to further solidify its position as the preferred choice for brands looking to elevate their customer engagement game in the modern environment.
Braze was founded in 2011 in response to the major step change ushered in by the smartphone. Bill Magnuson, Jon Hyman, and Mark Ghermezian created Braze (formerly known as Appboy) as a response to the evolving mobile landscape and the need for more effective, real-time, and personalized customer engagement. They identified that the crux of modern marketing was moving beyond mere audience segmentation and into truly individualized messaging, which the trio felt was lacking in the current market.
The early days of Braze focused primarily on mobile app engagement. Initial traction was moderate, but as businesses began to recognize the importance of personalized, real-time communication, Braze’s user-centric, data-driven platform found its fit. By 2014, the company had grown its user base substantially and was managing billions of messages per month.
Recognizing the need for flexibility in the tech ecosystem, Braze soon expanded its capabilities beyond mobile. By 2016, the company had introduced various new channels, including email, web messaging, and in-product messaging. Integration capabilities with other tech platforms like Segment, Amplitude, and Mixpanel also started taking shape.
As the company expanded its footprint setting up offices around the world, Braze underwent a rebranding from its original name, Appboy, signaling a broader shift from a mobile-centric vision to a comprehensive, holistic approach to customer engagement across all digital touchpoints.
Braze went public in 2021 after its IPO raised half a billion dollars. The company has continued to enhance its product suite, introducing features harnessing AI and machine learning to offer predictive analytics, customer journey optimization, and more.
Co-founder Bill Magnuson still serves as Braze’s chairman and CEO. Under his leadership, Braze has witnessed exponential growth as he has been instrumental in evolving the company from its early mobile-centric roots to a leading global customer engagement platform. Magnuson’s visionary approach as both CEO and previously CTO has consistently steered Braze towards innovative solutions. Prior to Braze, Magnuson was a software engineer with both Bridgewater Associates and Google.
Fellow co-founder Jon Hyman is also still with Braze as CTO, taking on the position in 2017 following his role as CIO since the company began. Hyman has overseen the platform’s seamless scalability, enabling it to handle tens of billions of messages per month while ensuring data integrity and real-time engagement. He also worked at Bridgewater Associates, where he gained insights into building large-scale, high-performance systems.
Braze’s platform helps brands to build lasting relationships with their consumers in a dynamic digital environment. This has been achieved through a comprehensive suite of tools that focuses on real-time, data-driven, and highly personalized interactions.
Most cross-channel marketing automation platforms available approach customer engagement on a channel-by-channel basis, which creates disjointed customer experiences and diminishes customer loyalty. Braze was built on the premise that brands must create personal and human connections with consumers through the consistent delivery of positive customer experiences.
Using the platform, brands ingest and process customer data in real-time and then orchestrate and optimize contextually relevant, marketing campaigns across multiple channels. This avoids the data and engagement silos that marketing point solutions create so that each touchpoint across channels and platforms is aware of other engagement events and can react to that activity in real-time.
In addition to a comprehensive backend of management, customization, and monitoring functionalities, at the heart of Braze lies its messaging capabilities, which allow brands to reach out to their consumers through a myriad of channels, including email, push notifications, in-app and web messages, and more. This approach ensures that customers receive messages at the right time, on the right platform, and in the most engaging manner.
Beyond messaging, Braze offers a rich suite of analytics tools that are powered by AI. These provide actionable insights into customer behavior, allowing businesses to tailor their strategies for maximum effectiveness. With tools like Canvas Flow, brands can tap into real-time data flow and make instant adjustments to their campaigns based on performance metrics. This enables brands to design customer journeys that are not only personalized, but also react dynamically based on individual behaviors and data. With this, businesses can map out intricate, multi-step campaigns across various channels, ensuring that every customer interaction is meaningful and timely.
Recognizing that businesses operate within vast tech ecosystems, Braze Currents seamlessly integrates customer data with other tools, including data warehouses, analytics platforms, and other marketing tech stacks to ensure customers can deliver a holistic experience.
From Pizza Hut to HBO to Venmo, Braze’s diverse customer base can use the platform to deliver personalized welcome messages to new customers, celebrate milestones, inform of new products and services, and inspire new usage, ultimately creating vastly more growth opportunities.
Businesses are increasingly recognizing the power of personalized communication and real-time interaction, consequently, Braze has and is positioning itself to cater to these nuanced needs with its sophisticated capabilities. Future growth opportunities are heavily leveraging development in AI-driven customer engagement particularly using first-party data. For several years, Braze has already had dedicated teams of data engineers and data scientists, focused on using machine learning to build AI into its product, to make marketers more effective and engage their end users by optimizing customer journeys, generating more relevant content, and enhancing targeting strategies.
The company debuted a GPT integration for email subject line generation over a year ago and was early to integrate generative AI for images into the message composition experience, launching a dashboard integration last December. More recently, it also launched a message content-checking tool, built on top of GPT4, helping marketers to avoid copyrighting mistakes, the accidental sending of text messages, or sending culturally insensitive content. Ultimately, lowering the burden of content creation encourages customers to bring new use cases into the Braze platform more quickly.
As companies become more data-driven, the need for granular segmentation, tailored reporting, and deriving actionable insights from their vast datasets will only intensify. Braze is also testing a wide array of new capabilities including generating SQL for advanced segmentation and reporting use cases, automatically suggesting improvements to message copy during composition, and even an adversarial AB testing simulator that the company believes may be able to generate and predict winning message variants for populations before a campaign is even launched. This capability can allow businesses to refine their strategies even before implementation, thereby ensuring higher success rates and ROI.
Braze’s proprietary, enterprise-grade stream processing architecture is enabling the company to exploit real-time interactions, and in turn, the emerging trends of real-time first-party data collection and integration of messaging within product experiences. This, coupled with Braze’s educational endeavors, can help onboard businesses that are in the early stages of adopting modern customer engagement practices.
Moreover, while expanding the use of the Braze platform with existing customers by adding new channels and increasing the messaging volume its sells remain key pillars of the company’s growth strategy, smoothing the on-ramp for new customers is a key part of ensuring that the differentiation presented by Braze’s sophisticated capabilities remains accessible to its ever-growing market. Even to those who are early in their journey of adopting the modern practice of customer engagement.
Since going public, Braze has maintained an impressive trajectory in revenue growth, delivering its third consecutive year-over-year increase of around 50% in FY23. This continuing trend saw revenue reach $355.4 million for the year, up from $238.0 million in FY22. This uptick is attributed to a substantial influx of new customers, robust upsells, and consistent renewals. The opening quarter of FY24 also started strongly with revenue of $101.8 million also including new business wins and upsells from the likes of Procore Technologies, Sonos, Sweetgreen, and Swimply.
Braze’s robust growth has not come without solid increases in sales and marketing, R&D, and general and administrative expenses, which rose by 63% to $387.7 million in FY23. The company is heavily focused on expansion and while net losses increased by more than 81% to $140.7 million, its successful IPO raised $467.9 million and issued close to nine million shares, resulting in a marked improvement in losses on a per share basis.
Looking ahead, Braze’s management is forecasting to close out FY24 with total revenue of $442.5 to $446.5 million, in line with consensus expectations for year-over-year growth of 25%. Earnings per share are also forecasted to continue its positive trend, going from a loss of $0.64 to a loss of just $0.51, marking a 20% improvement year-over-year.
Braze faces intense competition from software companies that offer marketing solutions, such as legacy marketing clouds like Adobe and Salesforce, and point solutions like Airship, Iterable, Leanplum (Clevertap), MailChimp (Intuit), and MoEngage.
In some cases, these companies benefit from greater name recognition and resources, longer histories, lower costs, and more mature intellectual property portfolios. Larger competitors, in particular, may use their broader offerings to bundle products with other functions or even close access to their technology platform, making it more difficult for customers to integrate other platforms. In addition, these competitors may have an advantage in markets where Braze’s policies regarding the use of customer data are more restrictive than local laws. For example, competitors willing to sell customer data in markets where such activity is permissible may have a pricing advantage over Braze in such markets.
However, while several established and emerging competitors address specific aspects of customer engagement, Braze believes that none of these market participants currently offer comparable comprehensive customer engagement solutions.
As more businesses pivot towards automating and optimizing their marketing campaigns, Braze’s tools are becoming indispensable for crafting relevant, engaging, and timely content. Its intelligent, real-time, and personalized interactions are setting the gold standard for future-oriented customer engagement.