Algolia is a search-as-a-service platform that provides the engine and tools for businesses to integrate indexing and real-time search into their e-commerce sites using developer-friendly API. Launched in 2012, the company has enjoyed phenomenal growth within the past 18 months, to the point that it's now the most used search engine in the world after Google. Having recently closed its latest round of funding on a $2.25 billion valuation, speculation is now growing about when we can expect an IPO. Find out more with these 20 things you didn't know about Algolia.
1. It was founded in 2012
Algolia was founded in 2012 by Nicolas Dessaigne and Julien Lemoine. Lemoine, who serves as Algolia's Chief Technology Officer, has previously served as director of natural language processing and indexing technologies at Exalead and as Chief Technology Officer at MASA, where he helped shape and lead the technology strategy of the company. Dessaigne served as the Product Management Director and VP R&D of Exalead from 2010. Prior to that, he was the Chief Technology Officer at Arisem. Dessaigne served as the CEO of Algolia until stepping down in 2020. He remains a member of the board of directors.
2. It started as an offline search engine for mobiles
When Dessaigne and Lemoine first came up with the plan for Algolia, they intended it to be an offline search engine that would work well on mobiles. It worked well enough, but it wasn't a success. Speaking to TechCrunch about the decision to switch to a web search product through a SaaS model, company co-founder Nicolas Dessaigne said, "Many people wanted us to run the search queries on our servers, so that’s what we did.”
3. It was part of Y Combinator's Winter 2014 class
In 2014, Algolia (which was already a member of Paris accelerator TheFamily) was accepted as part of Y Combinator’s Winter Class. Y Combinator, a seed money startup accelerator that's widely considered to be one of the most successful startup incubators in Silicon Valley, has helped launch over 2000 companies, including such well-known names as Reddit, DoorDash, Stripe, Airbnb, Coinbase, and Dropbox. According to Wikipedia, the combined value of the top YC companies is over $300 billion.
4. Its CEO is Bernadette Nixon
After raising over $110 million, co-founder and then- CEO Nicolas Dessaigne announced in May 2020 that he would be transitioning to a non-operational role in the company. His replacement is Bernadette Nixon. Prior to joining Algolia, Nixon served as the CEO of Alfresco, an I.T. company that produces information management software products for Microsoft Windows and Unix-like operating systems. Previous to that, she served as President of Customer Experience Solutions and Chief Revenue Officer at SDL plc, Senior Vice President at Open Text, and in various executive positions across other software companies.
5. It prioritizes culture over growth
Given the rapid rate of Algolia's success, it would be natural to assume its number one priority is growth. In fact, it's not. During an interview with Forbes.com, co-founder and former CEO Nicolas Dessaigne revealed that Algolia's first and foremost concern is company culture. "I want to be very careful about not creating too much emphasis on growth if the culture is going to suffer,” he said. “If you don't put culture first, by default it's going to be second. As soon as you don't keep it top of mind all day every day, you may not see what is really happening in the business.”
6. It doesn't consider Google a competitor
7. Covid was good for business
While many businesses have suffered enormous losses as a result of the Covid pandemic, others have been more fortunate. Algolia is one of the lucky ones. Demand for its service has grown exponentially over the past year, prompting Dessaigne to tell Forbes, “Covid-19 is a human tragedy. It is terrible for most people and bad for the world. People will move online way faster and move to the cloud. It is a great fit for them and will be a positive trend for us. It has caused our search volumes to go up 15% above Black Friday rates. There are winners and losers — e-commerce is a winner.”
8. It's grown rapidly
After starting with two data centers in Europe and the US, Algolia had grown enough by 2014 to open a third center in Singapore. Since then, the company's growth has continued unabated. It now has over 70 data centers across 16 regions, serving over 10,000 customers and powering 1.5 Trillion searches a year - just to put that into perspective, that's 6 times more than Microsoft Bing, 16 times more than Yahoo, and 50 times more than DuckDuckGo.
9. It's about more than turning a profit
Algolia is a company that likes giving as much as receiving, operating numerous community and charity programs to further its aim of being a very 21st-century workplace. In addition to operating a charitable matching program through which it matches any donation an employee makes to a charity aligned to its core values, it also works in partnership with local organizations to support community service and mentorship programs such as Konexio and Techfugees. Employees have the option to donate their referral bonus to their non-profit of choice, while its founders have pledged to donate a portion of their personal proceeds to charity. Since the start of the pandemic, it's offered any developer working on COVID-19-related, not-for-profit websites or apps a free product plan.
10. It's going green
We're all worried about our carbon footprint these days, and Algolia is no exception. To help keep its green credentials intact, it's taking a carbon-neutral pledge, using Pachama to keep track of its CO2 emissions, reducing the level by planting trees and buying carbon credit certificates to offset any remaining emissions. It's also stopped giving away goody bags at conferences, donating $10 to a non-profit organization for every attendee that fills in a contact form instead.
11. It's changed its pricing model
Until recently, Algolia's pricing model was infrastructure-based. The problem was, customers didn't like it. So they changed it to a simple usage-based pricing model that means customers with a lower level of search traffic aren't penalized. It now offers several different pay-as-you-go subscription packages for customers to choose between. These include Algolia Seach and Algolia Recommend, a flexible recommendation API with advanced programmatic control. Algolia Seach is charged at $1 per 1,000 requests/month +1,000 records, while Algolia Recommend is charged at $0.60 per 1,000 requests/month.
12. It's a great place to work
A company can shout as loudly about its culture and its core values and its mentorship programs as it wants, but there's sometimes a world of difference between the face it presents to the public and its real one. In Algolia, the two seem to be one and the same, at least according to the employee feedback on Glassdoor. The company has scored a very respectable 4.3/5, with 82 percent of employees saying they'd recommend the company to a friend and a full 100 percent saying they approve of the CEO.
13. It's a member of the unicorn club
This July, Algolia raised $150 million in a Series D funding round led by Lone Pine Capital. Other participants in the round included new investors Fidelity Management & Research Company LLC, STEADFAST Capital Ventures, Glynn Capital and Twilio, and existing investors Accel, Salesforce Ventures, DAG, Owl Rock, and World Innovation Lab. The post-money valuation was put at $2.25 billion, more than 4 times the previous value set during the Series C round in October 2019. It means that Algolia has now joined the unicorn club, that exclusive group of startups with a value of at least $1 billion.
14. It's extended its product offering
In a bid to diversify its product offering, Algolia now offers other real-time APIs in addition to its search API. Algolia Recommend, for example, allows customers to provide real-time product recommendations to users searching their company website. It also offers companies the chance to analyze the intent of its visitors and maximize sales opportunities by displaying special offers, sending push notifications, or refreshing the content.
15. It's been on a hiring spree
Algolia's rate of growth over the past couple of years has been phenomenal, with the result that it's had to expand its staff significantly. According to confabulatory.net, in the last 18 months alone, it's inflated its executive team to include chief revenue officer Michelle Adams (formerly of Dropbox), chief financial officer Carlton Baab (formerly of Alfresco), chief business development officer Piyush Patel (formerly of Capgemini), chief customer officer Jim Schattin (formerly of Alteryx), chief marketing officer Jason McClelland (formerly of Salesforce and Adobe) and chief product officer Bharat Guruprakash (formerly of Twilio).
16. It's not unique
Algolia might be one of the most successful companies in its segment, but it doesn't have a monopoly on “search-as-a-service” platforms. As stackshare.io notes, other companies working on a similar concept include Elasticsearch, which provides a distributed, RESTful search and analytics engine that can store data and be searched in near real time; Solr, an open source enterprise search platform from the Apache Lucene project that offers full-text search, faceted search, dynamic clustering, database integration, hit highlighting, and near real-time indexing; Swiftype, a popular search platform for both website and mobile applications; Microsoft Azure Cognitive Search (formerly Azure Search), the only cloud search service with built-in AI capabilities; and Klevu, an eCommerce search solution that delivers real-time search results based on shopper intentions and behavior.
17. It listens to its customers
Algolia is a company that understands the power of feedback. Throughout its history, it's asked its customers questions and listened to the answers, changing its plans and pricing to bring them in line with consumer needs. Speaking to Inc.com about how the company has created its vision by keeping its customer base at the centre of all its activities, CEO Bernadette Nixon explained, "To develop the vision, we spoke with many customers. We couched our idea in the words they were using. What do we do for them today? How has Algolia changed their life? How has it become more relevant today? What's holding them back from achieving their goals?"
18. It bought MorphL in January 2021
At the start of the year, Algolia finalized a deal to acquire the Romanian AI and machine learning startup MorphL. Founded in 2018, MorphL uses AI to predict customer behavior on e-commerce sites, offering clients various tools to power recommendations and related products based on the predictions. As VentureBeat notes, while Algolia already had a number of AI-powered tools in its portfolio, it will now be able to leverage MorphL’s recommendations and user behavior models to drive conversion and personalization.
19. It has some big name customers
Algolia is now used by over 10000 companies across a wide range of sectors. Just a small sample of the businesses using its search platform to power their e-commerce sites include Under Armour, Dunelm, The RealReal, ManoMano, Stripe, Slack, Lacoste, LVMH, NBC, Ouest-France, Societe Generale, and Dailymotion.
20. It's an award winner
Since its launch, Algolia has been decorated with numerous awards and titles. In 2018, Forbes named it to its Cloud 100 list. This year, the publication doffed its cap to the start-up again when it named it among its Best Startup Employers 2021.
Written by Allen Lee
Read more posts by Allen Lee