From Web CMS to a New Way of Building Software: A New Round of Funding Validates Our Market Strategy
Today, I’m excited to announce that we raised an additional financing round of $33.5 million, led by Sapphire Ventures, with participation from Salesforce Ventures, OMERS Ventures, and our existing backers General Catalyst, Benchmark, Balderton, and Hercules.
This investment is further proof of how much the CMS market has changed in a short period of time.
Just a few years ago, our CTO Paolo Negri was building backend services for large-scale online games, and I was developing native mobile applications for the iPhone. We were both incredibly frustrated with existing CMS options. These systems were architected in the early 2000s to manage page-centric websites while running on a single server. They made it hard or even impossible to solve our problems as developers, which involved delivering content through APIs to games and mobile applications at scale.
When we launched Contentful in 2014 as a cloud-native content infrastructure built on top of APIs, legacy CMS vendors, industry experts and friends who worked as CMS consultants saw Contentful as a toy for niche use cases. They considered APIs and interoperability to be tack-on features, not an underlying product strategy.
Over the last few years, web CMS vendors continued to build functionality for IT and marketers. Meanwhile, developers fell in love with Contentful’s API-centric approach, as it allowed them to deliver content across platforms to their preferred front-end languages and frameworks.
Now, the puzzle pieces are all coming together — it’s evident that the needs of the entire market have shifted, not just how developers build websites.
The end of web CMS
One thing I learned as Contentful grew and matured as an organization is that while it’s easy to stick to existing processes and metrics, we can’t rest there because goals shift over time. It’s crucial to regularly take a step back, reflect and reconsider our approach, as well as how we measure success.
In the early 2000s, when web CMSes were born, they were a good tool for getting enterprises online and allowing them to build their first virtual presence on the web. Now, looking at the big picture, it’s clear that we are reaching the end of the era of web CMS.
Today, building a website is table stakes. Enterprises demand much more — instead of a static website, they must build digital products to address different audiences and purposes, across many digital channels. Building software drives revenue.
Even websites can no longer get away with being static, and are becoming applications with sophisticated personalization and algorithms underneath. If enterprises don’t adapt to this change, then an Amazon, Uber or the next upcoming technology startup will disrupt their core businesses.
Content is often at the core of new digital experiences. So for CMS, it’s no longer about using drag-and-drop tools to build a website that increases the number of web visitors — it’s about enabling businesses to build new products that directly drive revenue.
However, as everyone who has ever built a digital product knows, it is not always simple to know what your customers really want, and it requires many iterations to make a new product successful (I’m a big fan of the Cynefin framework). For example, a monolithic web CMS that is often customized heavily to fit the needs of an organization is too bulky and slow to allow for fast iterations.
Industry experts criticized our approach early on, but have since evolved their thinking. One expert recently called some of the most prominent legacy CMS platforms a “total clusterfunk” (RealStoryGroup), while Forrester now projects “the end of Web CMS as we know it” (Forrester, paid).
The modern stack evolves
With the rise of modern cloud services, every organization can rely on best-in-class services for each problem domain (e.g. content, commerce, payments, customer relations, etc.) that will continuously be improved by the vendor.
Thanks to this modern stack of cloud services, instead of building from scratch, which is slow, or buying and customizing an off-the-shelf product (also slow), organizations can buy reusable components and assemble them with other services as needed. And this can all happen fast, enabling organizations to be agile and focus on providing differentiated value, such as building customer experiences or modernizing their brands.
This new way of building software is used by the most successful digital disruptors:
Global brands and leading agencies are successfully using this modern ecosystem in production and at scale: Spotify, Urban Outfitters, Heineken, Lyft and more.
Modern best-in-class vendors are working together. For example, by forming the Digital Experience Stack Alliance to create industry standards for easier interoperability.
The technology ecosystem continues to improve rapidly, both for stitching APIs together (GraphQL and services like Apollo) as well as for enabling modern frontend development (React.js, Gatsby, Netlify)
Our mission: Modernize how content flows
At Contentful, our mission is to modernize how content flows. We strongly believe in the new stack as a new way of building digital products. Content is stuck in legacy CMS. The CMS market will need to evolve, and we’ll continue to lead this transformation.
This new round of funding gives us additional resources to achieve our mission and build out our offering. Alongside continuously improving our developer experience, our focus will be on enabling practitioners by improving our authoring experience, further aligning our product with enterprise demands and adding integration capabilities with other software vendors.
That’s also why I’m excited about our new investors. I have heard from many of our enterprise customers that they want to further integrate their content with their existing stack of enterprise systems. With Sapphire Ventures (spun out of SAP) and Salesforce Ventures, we have found the right allies to help us modernize how content flows inside large enterprises.
When we first went live with Contentful in 2014, we had just 12 employees and a few small customers. Today, we have more than 200 employees from 45 countries and offices in Berlin and San Francisco. We power content for some of the world’s biggest brands, and I look forward to seeing Contentful continue on this incredible, category-defining trajectory.
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