QED Investors and Invus Opportunities co-led a US$22.6m investment in Escale, a Brazilian digital marketing agency providing customer acquisition services to Brazilian telco and healthcare companies. Previous investors KaszeK Ventures, Redpoint eventures and Rocket Internet’s Global Founders Capital participated in the round.
(Press Release) QED Investors and Invus Opportunities have just led a $22.6 million investment into Escale, a São Paulo based tech company that partners with Brazil’s largest brands, transforming their sales funnels into highly-efficient, digital buying experience. Escale’s investment continues to highlight the opportunity in Brazilian technology companies, with Softbank announcing a dedicated $5 bi Latin American fund and companies such as Nubank, QuintoAndar, GymPass and Loggi also attracting major foreign investment this past year. Escale’s round included additional investment from Kaszek Ventures, Rocket Internet’s GFC and Redpoint e.Ventures.
Since initial days in its founders’ apartment, the company has now grown to over 500 employees and with clients including NET, Claro, Sul America, Bradesco, GNDI and Amil. Escale’s co-founder and co-CEO, Matthew Kligerman, recalls his experience moving to São Paulo, “we fell in love with Brazil for its warm culture and natural beauty, but as consumers, we had terrible experiences acquiring the most fundamental products and services for our new lives: internet, cell phone plans, health insurance and basic banking needs. My business partner and I found we were not alone; consumers increasingly expect ease and transparency to make important purchase decisions. Brazilian brands have seen the trend and realize they must create positive buying experiences to compete in a rapidly evolving market. This is the problem Escale was born to solve.”
In 2019, Escale will acquire over R$2.0 billion reais of incremental customer life-time revenue for its brand partners. That number has more than doubled every year since the company’s founding. How? Escale partners with Brazil’s largest brands and, powered with data from millions of prior consumer interactions, transforms normal sales funnels into highly-efficient, digital buying experiences. In more complex sales funnels, Escale’s digital sales platform integrates with its own inbound sales center, managing the customer interaction from end-to-end. For consumers, Escale creates transparent and smooth buying experiences for the most important products and services families and small businesses need. And for brands, Escale generates incremental demand via its website portfolio, cross-sell partnerships and opt-in customer database to deliver new, incremental customers brands otherwise would not access. In confidence of their results, Escale works in a 100% performance model, compensated for each activated customer delivered to its brand partners.
When asked how the $22.6 million will be used, Matthew Kligerman discussed three major areas of investment. “We’ll invest heavily in our technology and data platform to ensure more efficient and transparent online-to-offline buying experiences for consumers. We’ll deepen our relationships with brand partners in the telecom and health insurance markets, as well as expand into consumer finance, insurance, education and other markets. And we’ll continue expanding our demand generation volumes, to deliver even more customer prospects to our brand partners’ sales funnels.”
As Ken Diamond, co-founder and co-CEO, reflects on what has led to Escale’s growth, he responds emphasizing two pillars, “Talent and culture. For as much as we invest in data and technology today, our greatest asset is our world-class team and company culture focused on enabling talent to realize their full potential. We have a methodology for quickly launching, improving and scaling new business units, that enables talent to develop through the entire life-cycle of building and growing a business.” Indeed, Escale has been silently bringing the best talent in the industry together, and now ranks as the second most loved company in all of Brazil by its employees, according to a ranking of large companies from LoveMondays that collected results from over 180.000 companies.
QED Investors has a history of partnering with founders to build high growth financial services companies in the US and Brazil, building on the partners’ history helping build Capital One. Senior Partner Bill Cilluffo noted, “We are thrilled to be a part of the Escale team. We were initially impressed by the volume of high-value customers Escale delivers to its brand partners but became much more excited as we understood how many major brands are looking for Escale’s help to transform their sales funnels into highly efficient, customer acquisition programs. We’re particularly excited to support Escale with their credit algorithms in the consumer finance market to guarantee more profitable customers for their partners.”
Nico Berman, Kaszek partner and Escale board member, explains, “Escale’s opportunity to bring massive growth to their partners is gigantic. With millions of web and cloud voice interactions every month, Escale can transform each of those interactions into data points, and continually improve its proprietary acquisition platform, ‘EscaleOS’, to create highly-intelligent, customized marketing and sales funnels, helping consumers at the right moment connect with the products and services they need. The more consumer interactions they have, the faster Escale’s data flywheel spins.”
David Kahane, partner at Invus Opportunities explained their interest, “we’ve backed many of the largest consumer facing brands in the world and deeply understand the challenges brands face around customer acquisition. When we look at Brazil, we see an opportunity for Escale to fundamentally transform the market far and beyond its existing model. We look forward to being long-term backers of Escale and continuing to invest to build out its full vision.”