The Story Behind Our Investment In Second Measure

About 3.5 years ago, we met Michael and Lillian from Second Measure while they were in Y Combinator. We were lucky to invest not only during this time, but also doubled down in an extension. And this week, the company announced it had raised a super-sized $20M Series A financing co-led by Kent Bennett from Bessemer Venture Partners and also Goldman Sachs. (The round was completed last fall, but announced this week.)

Second Measure is a unique company that also boasts a unique customer set. Second Measure’s technology empowers its customers to drill into consumer spending behaviors from a number of angles. With over 150 customers now, they range from financial institutions such as VC and PE firms, consumer product companies, and media organizations. These customers leverage Second Measure to analyze and cross-analyze how consumers are spending their cash, but going deeper, the platform enables customers to analyze rate of growth, cohort retention, benchmark against category competitors or regional performance, and much more. The company’s blog has become a destination for original research on consumer behavior and insights — check it out here:

The company received investment interest for a few years, but took their time to raise the Series A. The trajectory of Second Measure isn’t the norm, but I believe we could see more of this kind of path: The company went through Y Combinator, raised a small amount from individuals and microfunds (like Haystack), as well as a few discovery checks from larger VC funds, such as Bessemer which led this round. The company raised a seed-extension round midway through, and was doing well enough to use revenues to keep financing the business to iron out some wrinkles in the business and data model. As the company accumulated leverage, it was able to more or less control the timing in which it accepted Series A capital.

When I began investing in 2013, the Series A rounds were quite fast and furious after the seed rounds. That is not the case today. In conversation, most seed investors in private conversations (myself included) have all felt a longer period of time between seed rounds and A rounds, and that the overall rate of conversion to Series A rounds has declined and will continue to go down. On the other hand, solid businesses like Second Measure which have found product-market fit within the seed stage have more leverage on when to take financing and from what firm. We are lucky to have been involved with Second Measure from the early the days. Both Michael and Lillian were gracious in letting us participate not once, but twice, and are now well on their way to realizing the original vision for their company.