Paulo Martins, founder and CEO of Arena. Photo: Courtesy.
Business

Founded by Brazilians, San Francisco-based Arena raises a $13.6 million Series A while making its "way back" to its roots

Experiences at NASA and Hulu, and even a year living in his car, are part of the trajectory of Paulo Martins, CEO and co-founder of Arena — a platform that is helping companies like Fox Sports, Globo and Nubank create their own digital communities.

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Martech Arena, a startup dedicated to helping companies bring customers from different platforms and social networks into their own channels, creating engagement and building communities, announces this Wednesday (30) a Series A round of $13.6 million led by CRV and Craft Ventures and executives from Shopify, Twitter, Twilio, Datalog and Intercom. The new funding arrives along with the physical landing of Arena in Brazil, a move pulled by the weight of some of the clients that the startup has already conquered in the country, such as Globo, Nubank, VTEX, and UOL. More than a startup exploring the potential of the most connected population in Latin America, Paulo Martins, CEO and co-founder of Arena, wants the startup to be a bridge for every Brazilian who wants to know what it’s like to launch and grow a tech business in the U.S.

In an interview with LABS about two weeks ago, shortly after closing the new round, he talked a bit of his trajectory and what lies behind the move of opening an office in Brazil, a plan in which Arena is investing almost $3 million.

Martins graduated in Computer Science from the Federal University of Uberlândia (a city in Brazil‘s Midwest) and completed two master’s degrees right afterward, one in France and the other in the United States. The last one was also the “excuse” Martins needed to experience what was his biggest dream: getting to know Silicon Valley up close so that he could open his own tech company one day.

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He worked for a year as a software engineer at NASA, spent two years as a data engineer at Ubisoft, and then another two and a half years at Hulu‘s ad product team. Martins was Hulu’s employee number 74, working at the video streaming platform, which, at the time, 2012, was in its ramping up moment in the United States. Today, Hulu is controlled by Disney.

“There, I could watch and learn from the source about how a typical Silicon Valley startup works. I learned everything I had to learn, left the company, and went to live in my car for a year and a half. It was a bootstrapping phase between 2015 and 2016. In 2017, I founded the company [alongside Rodrigo Reis, former CTO of Arena]”, said Martins.

Three years later, in 2020, Arena raised a $2.3 million seed round led by Redpoint ventures and other Silicon Valley investors. Before the seed round, the company had already raised about $1 million from investors such as the Incubate Fund, Plug and Play, and Intango Ventures.

Martins does not disclose revenue figures but says Arena’s earnings increased more than five times between 2020 and 2021. Currently, the martech startup has over 25,000 clients, which have more than 200 million monthly users, who send 2 billion messages every month. The goal for this year is to grow at least four times, reaching the mark of 100,000 clients.

Like Globo, Nubank, and VTEX in Brazil, as well as Fox Sports, Microsoft, and Sony Music in the United States, companies in the sectors of e-commerce, fintech, media and online education are at the center of the startup‘s attention.

Arena has clients ranging from small companies, who pay $99 or BRL 288 per year, to large companies (40% of Arena’s total customers), who pay annual plans of up to $500,000. Arena uses the good old freemium strategy, also adopted by Slack, Dropbox, or even Spotify, through which any customer has limited access to Arena’s basic features.

“Our goal [with the new funding] is to turn our eyes to our roots. First, for the acquisition potential of new Brazilian clients, the ones we have came to us organically. Second, we want to bring in talented people who want to be part of a fast-growing company and experience, understand, and be an entrepreneur in Silicon Valley. Arena’s members own shares in the company and have access to sponsorship to come and stay in Silicon Valley for a while, with visa assistance and everything else they might need,” explained Martins.

Martins is searching for talented professionals, mainly in the product and development areas. Arena will open 55 positions in Brazil this year (some are already published on the company’s careers page)

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How Arena works

Arena provides a unique pixel that captures primary customer data from the companies it serves. This primary data is processed through an AI engine and inserted into an experience personalization system – this means that users will receive personalized messages and offers according to what they consume within the company’s channels.

The great thing about Arena is that it offers customization at scale, combined with other engagement tools, such as live chat or live blog and browser notifications, for example. With this approach, Arena brings customers dispersed across different platforms into the companies’ own channels – something strategical in this new digital marketing era of new privacy rules and the death of cookies.

In other words, Arena turns customer conversations and interactions back to companies’ websites so they can fully control their customers’ experience without having to rely on intermediaries.

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For example, in the case of Globo, Arena is helping LatAm’s largest communications group bring people interested in Big Brother Brasil – BBB (the country’s biggest reality show) into the company’s website and streaming platform.

Users are invited, via an Instagram story, for example, to participate in a chat about the elimination of one of the candidates. By clicking on the link on the story, they go to Globo’s website, where Arena’s tools are already plugged in. Then, to participate in the live chat, they pre-register.
With each visit and interaction, Arena learns what users like anonymously. “There are 50,000 to 100,000 simultaneous accesses at the chat, which brings us a huge technical challenge because we have to create a personalized experience for each of them,” pointed out Martins. In practice, what happens is that users receive messages and offers not only to subscribe to GloboPlay (Globo’s streaming platform, where they can follow BBB 24 hours a day) but also other content and services suggestions that may interest them based on their online behavior.

The new professionals (and partners) that Arena is looking for will also have the mission of beefing up the platform to be resilient enough to serve cases like Globo’s — huge companies with immense traffic and equally colossal growth potential.

“We have everything, the product, the demand, the investors. Now we need talented people wanting to rise with us. Everyone who enters now will experience the whole process,” said Martins.

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