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April 11, 2017

Lucid’s $60 million financing round, and what its CEO says it means for New Orleans

Lucid, a global audience platform based in New Orleans, has raised a $60 million financing round, money CEO Patrick Comer says will be used to grow the company's footprint worldwide and hire 100 people in 2017.

By: Jennifer Larino, Nola.com | The Times-Picayune

Patrick Comer, founder and CEO of global audience platform Lucid, had spent a decade working at tech startups before he landed in New Orleans in 2008.

At the time, the local tech scene was long on hype, but short on viable companies. Comer was one of the few around who could swap stories from the Dotcom bubble; who had seen the inner workings of high-growth tech startups on the East and West Coasts up close and personal.

“It was a bit of a Bizarro land given I had just come from New York and L.A. where there are tons of people who have had way more experience and more success than I did,” Comer said.

That experience is paying off. Lucid has closed a $60 million funding round led by Boston venture capital firm North Bridge Growth Equity. The company plans to grow its global footprint and hire 100 people in 2017.

The deal is the largest capital raise in recent memory for a homegrown startup, much less a homegrown tech startup. For Comer, it is proof New Orleans can grow the kind of disruptive tech that draws big investment. That efforts to grow tech locally will bear fruit, given time and the right mix of experience.

“This for me is a signal that it is working, that the effort is more steak than sizzle,” Comer said. “For years we’ve been really good as a community about telling the story, getting energy up, the excitement up. People have been waiting for those companies that would actually deliver.”

How will Lucid use the money?

Comer said Lucid will use the money to expand its global footprint, which already includes offices in London and New Delhi, India.

It also plans to hire 100 people in 2017, including about 70 people at its New Orleans office, which this summer will add a second floor of workspace in the One Canal Place tower at the foot of Canal Street. Comer said the company is looking to hire for “everything,” from marketing roles to software engineers and data scientists.

Founded as Federated Sample in 2010, the company rebranded as Lucid in 2015 with a range of products aimed making it easier and faster to harness the power of “human answers,” or the tons of data that can be culled from people who take surveys online. Its products include Fulcrum, an automated global marketplace for buyers and sellers of market research sample, the industry term for the groups of people who respond to survey questions.

Like Uber and Lyft created a digital marketplace to connect drivers with those who need a ride, Lucid’s digital platform connects companies who want to learn more about their customers with the samples they need.

Today, Lucid has more than 500 customers in 92 countries. It’s tripled in size and revenue since 2015, the company said in a statement. More than 14 billion questions have been asked and answered through its platforms. (Its website has a running ticker you can watch run day and night.)

‘Riding the lightning’

Comer said Lucid focused on cornering a market it knows well and pouring any profits back into growth. The company raised just $2.8 million in its last round, a figure that leaves Silicon Valley investors scratching their heads.

Comer and his team at Lucid call their strategy “riding the lightning” — make money to cover the venture capital you spend and reinvest what’s leftover.

“We’re going to build fundamental value in the current business, not potential value in the future business,” he said.

What’s next for Lucid?

Comer said Lucid is now at a crossroads. It is big enough to capture the attention of larger competitors who want to do what it does, only better.

“Just because you’re first that does not anoint you the winner,” Comer said. “It just means you’re out of the gate fastest.”

Lucid has a firm foothold in the U.S., but it needs to grow its reach worldwide, including in Europe, which drives roughly 40 percent of the global sample market.

“We have to put the pedal to the proverbial metal and go into a lot of markets quickly,” Comer said. “We’ve got to get out there, we’ve got to grow.”

To that end, Lucid opened a London office in 2014. When analysis of its customer base revealed a hotspot of users in India, it moved into Gurgoan, a city outside New Delhi that emerged from agricultural wasteland to house operations for some of world’s largest tech companies. Comer said the company is now in the process of building a new team in Brazil as well as eyeing locations in the Middle East and Africa.

The company is also expanding its products. Last year, Lucid rolled out Proof, a product for measuring audience and how effective advertising is. The technology allows the company to place an invisible tag on a website or online ad and determine who is clicking on it and where they are coming from. It can also ask users questions about their experience.

“The overall goal of the fundraise is to grow the business at the same rate as we’ve been growing it in the category that we’ve created,” Comer said.

Would Lucid ever consider a sale? “We’re not for sale as long as we know how to grow the business,” he said.

What does this mean for New Orleans?

Technology has slowly started to take root in the city, though it is still a drop in a bucket filled by regional industry titans such as tourism and energy.

Critics like to point out New Orleans will never be Silicon Valley and the region would do better to focus its efforts on attracting and creating industries that align with local strengths such as advanced manufacturing and renewable energy. The city has already seen a few high-profile startup failures, from the Dinner Lab bankruptcy to the rapid rise and fall of DNA and toxicology testing startup Renaissance Rx.

Tech cheerleaders, on the other hand, hang onto every job added, every drop of capital — even the small bits — as evidence of a thriving community, or “ecosystem.” (Some are still citing an Inc. opinion article from 2011 naming New Orleans as the “coolest start-up city in America.”)

Comer, who started his career in New York at the height of the Dotcom era, sees it all as part of the healthy evolution of the city’s tech scene. He noted New York had countless skeptics who said the city would never be a hub for tech startups. There just wasn’t enough venture capital. The tech talent wasn’t there.

“We see how that turned out,” he said.

He hears the same things about New Orleans. He brushes them off as excuses. The right product backed by the right team with the right experience will draw people and money, he said. That kind of growth takes time, he added.

“We’re essentially training a new generation of entrepreneurs or the teams around them that will build companies, that understand the risk reward, they understand the context, and they know what they need to do regardless of what the business vision is,” Comer said.