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How an investment company gets insights into 200k companies per month
“SEMrush is pretty important for keeping us efficient in terms of how we spend our time. Every single day you're looking at a hundred companies, you want to make sure you go with the company that you have the most information about, that you filter to the ones that you're most confident about. And the signals that we get allow us to have that confidence around the companies that we want to work with. SEMrush is our primary signal for marketing.”
Business Challenge:
In an ocean of start-ups, it is essential to know what you’re investing in. There are a number of ways to explore a potential investment, but it always pays to be well prepared. “It's really hard for venture capitalists like ourselves to really understand how a company is deploying their marketing dollars,” says Conrad Chu, Operating Partner at Eventures. “Typically, you can only gain that information once you are fairly deep in conversation with a company.”
Understanding how businesses are spending their money – especially marketing budgets – can be a meaningful indicator of their current strategies and financial situation. One can certainly ask a company directly, but when you need to analyze a few thousand companies per month that can get tricky. e.ventures was looking for a tool that would enable such insights quickly and painlessly.
Solution:
e.ventures turned to SEMrush to see if they could use its marketing data to better their investment decisions. With 200,000 companies a month that they review and analyze, e.ventures leverage their own proprietary platform in conjunction with the Semrush Traffic Analytics API. Conrad comments: “When it comes to finding signals regarding how marketing dollars are being deployed, there are not a lot of options. SEMrush is one such signal. It's about discovering new companies based on their use of marketing dollars and that's the way we find them. And then, of course, once we engage with them, we can actually go deeper on their finances. SEMrush data especially the PPC spend, Ad spend, as well as the website traffic growth signal. is a reliable proxy for us to use to see how much companies are actually spending.”
A typical scenario would be to search for a correlation between marketing expenses and growth. “We find companies who spend on marketing to fuel their growth. Let’s say it's a small company with limited capital. If you know this kind of company is scaling their marketing while being limited in capital, it is an indicator of a sound economic engine with confidence to spend their marketing dollars to grow.”
However, sometimes the insights provided by SEMrush can be seen as counterintuitive, but that’s when they are most valuable: “We may come across companies that are growing and they're not spending marketing dollars. So, this is a case where SEMrush is telling us not how much they are spending, but how much they're not spending. That's important because we can therefore triangulate that their growth is probably coming from organic means. It’s not coming through paid. I put those pieces of information together and now I know I have a company that's growing without paying for it,” says Conrad.
SEMrush is often used to confirm things about a company rather than being used as a way of finding companies. Conrad describes a possible case: “Often companies are out fundraising and they'll spend more money on marketing to improve some of their numbers before they go out fundraising for more capital. Suddenly their numbers are a lot better and you, as an investor, need to look at how those new users have been acquired. SEMrush gives us a signal that it might actually be a momentary time.”
SEMrush enables e.ventures to go into an investment with underlying intelligence of where a company’s growth comes from. That's always a concern for investors and SEMrush gives them that necessary information. “It's pretty much the first thing we see when we come into the office. It's our primary signal for marketing, giving us confidence around the companies that we want to engage with,” says Conrad.
Results
- SEMrush enables e.ventures to get insights into 200,000 companies a month
- The signals e.ventures processes from SEMrush tell them not only companies they want to invest in, but, more importantly, companies that they don’t want to get involved in. Sudden spikes in new users or traffic both act as indicators of how a company might be doing financially.
- e.ventures optimizes the time spent on investment decisions
- e.ventures is confident that, with SEMrush, they have as much marketing information as possible to guarantee they are well equipped to analyze hundreds of companies daily and to make the right investment decisions.
- Data-informed decisions
- Rather than relying on what potential investees might say about their current situation, e.ventures can fully trust their own SEMrush-powered data on any company’s marketing expenses.
