amplitude - ampl additional info

[jendrizzi]

Teach a man to fish. Thanks to Saul and all the insightful board contributors that have helped to make this board my go to for investing insight and discussion. First post for me. Thought I would add to the discussion on amplitude after having opened a small (3%) position upon seeing ampl pop into the portfolios of some well respected contributors (bear and stocknovice)

The business concept is legit and growing in importance in our transitioning digital first world. It is taking the analytics of a digital experience to a deeper level. First generation analytics show traffic numbers and click patterns. The evolution of this is deeper and more granular information about the customer experience in your company’s digital environment. This helps companies answer the questions “why are people interacting with the digital experience the way that they are and how can we make it better (i.e. more profitable)” via data acquisition and analysis. SAAS in its glory. My humble guess is that this isn’t a big enough fish for google, amazon and facebook to spend the money to refine their analytics services yet but…

There are several up and coming companies that are in the space. Here is a brief look at 4 of the companies. Amplitude is the only one that has gone public. It is not my intention to be OT with mention of privately held companies but to give depth to conversation about competition in the space.

From my review of the companies that are listed below, Amplitude does not have a moat. They do not have first mover advantage. They don’t have a product or support that looks remarkable versus the competition according to product reviews.

They are executing appropriately in an industry that is catching fire. Companies are throwing money at their digital experience and these companies are the beneficiary.

Amplitude – ampl

VC funding $306M, went public in sept 2021, market cap $8.6B

Founded 2012 in San Fran, Spenser Skates CEO and co-founder, glassdoor rating of 94%, 201-500 employees, 135 job openings listed, offices in NYC and San Fran US, Amsterdam, London, Paris, Singapore.

Customers include Ford, Walmart, ABinbev and Atlassian.

We have seen a couple of the other numbers but some that I might highlight here are ARR of $150 million with 119% NRR with 51% annual growth in new customers

Pendo

VC funding $359M, privately held

Founded 2013 in Raleigh, NC, Todd Olson CEO and founder, glass door rating of 78%, 501-1000 employees, 111 job openings listed, offices in Raleigh, NYC, and San Fran US, London and Sheffield UK, Yaqum and Herzliya Israel.

Customers include Okta, Citrix, Verizon and Cisco.

This company announced ARR in August 2021 exceeded $100 million for the first time. They also added 195 new customers in the quarter. No breakdown on new customer spend that I could find.

Mixpanel

vc funding $77M, privately held

Founded in 2009, Amir Movafaghi CEO, 81% glassdoor rating, 201-500 employees, 41 job openings listed, offices in San Fran, Austin, NYC, Seattle, Barcelona, London, Singapore.

Customers include Docusign, Uber, Yelp, Expedia.

Heap

VC funding $108M, privately held

founded 2013 in San Fran, Ken Fine CEO, 97% glassdoor rating, 51-200 employees, 52 job openings listed, offices in San Fran, NYC, London.

Customers include eTrade, Amway, snapfish and splunk.

I hope that this adds depth to the conversation about a new company on the board. Any additional information that can be provided ahead of 09 November market close earnings call would be greatly appreciated.

Joe

[OH2CT]

One of the concerns I had with Amplitude coming into this quarter is the impact Apple’s IOS privacy updates will have on their ability to track application performance for their customers.

Here is what I found on Amplitude’s help pages. https://help.amplitude.com/hc/en-us/articles/360047228311-FA…

Apple announced that iOS 14 will require users to opt in to tracking. This means that the IDFA will only be present for users that explicitly opt in. The expectation is that the percentage of users who opt in will be relatively low.

What are the implications of Apple’s IDFA changes on user tracking?

For all logged-in users, there will be no impact, because even if the device id changes, events will continue to merge from devices when the Amplitude platform receives a common user id. This will only potentially have an impact on anonymous users.

For anonymous users, there will be no changes in most cases because the vast majority of our customers are not setting IDFA as the device id. In the cases where an application is already using IDFA as device id, this device id was stored when the SDK was originally initialized, and it will continue to send Amplitude the same id so long as the application remains installed on the device.

If a user deletes and reinstalls an application that does use IDFA for device id, the former device id will not be retained, and a new random device id will be generated unless the user grants the application permission to use IDFA.

For all new application installs, the SDK will accept IDFA if both the user has opted in and the application chooses to use IDFA.

Does Amplitude require IDFA on attribution events?

We do not require IDFA. Amplitude’s attribution API will accept both IDFA and IDFV, and will attempt to match those ids to user events that subsequently come in. In some cases, IDFV will be sufficient to make a match, but some of our customers’ attribution providers only send IDFA, and we will no longer be able to match attribution events unless the user has explicitly opted in to both the referring and installed application.

How will this impact any outbound integrations?

If you are sending data to any of your outbound integrations, there will be a lower match rate if you use IDFA to match devices between Amplitude and the integration. We recommend that you switch to IDFV or another common identifier instead.

While this all falls outside of my technical competence, here is my summary .

Amplitude expects that most IOS users will not opt-in. However, the IOS changes should only affect a minority of their customers who use IDFA (identifier for the advertiser) for device identification. In these cases, they recommend switching to IDFV or another common identifier.

The real problem seems to be for customers who use an attribution provider who only uses IDFA. In this use case, Amplitude will lose the ability to match attribution events. My assumption is that this use case is minor and has less to do with Amplitude and more to do with the customer’s attribution provider.

In the end, I anticipate this to be a non-event for Amplitude investors. With that said, please know that this is out of my realm of expertise and so back-up from someone who speaks this language better would be much appreciated. I simply looked into it because it was an outstanding question in my mind since Apple policy changes are having a tangible impact on some companies who rely on customer tracking.

For more on what an attribution provider is see https://segment.com/academy/choosing-stack/how-to-choose-the…

For more on how Amplitude tracks users see https://help.amplitude.com/hc/en-us/articles/115003135607-Tr…

-jordan