Statsig Inc., a new startup with a cloud service designed to help companies find ways of improving their software, on Thursday said that it has closed a $10.4 million funding round led by Sequoia Capital.

The investment also saw the participation of Madrona Venture Group, as well as a group of angel investors. Among Statsig’s backers are senior executives from Robinhood Markets Inc., DoorDash Inc., Instacart Inc. and other major tech firms.

Statsig was launched about six months ago by a group of former Facebook Inc. engineers. The startup has developed a service that enables enterprises to create different versions of an application component, for example the interface, and identify the version most popular among their users. 

An online retailer might use Statsig’s service to find ways of enhancing its e-commerce website. The company’s developers could create a new shopping feature to boost recurring purchases, then perform an assessment using Statsig’s service to determine if it will achieve the intended result. 

Statsig evaluates the impact of new features by running so-called A/B tests. In an A/B test, a company makes a product enhancement available to a small subset of its customers while other users continue to access the original version of the product. The company then compares the user experience of the two groups to determine if the enhancement produced improvements.

There are already a number of tools on the market that enable developers to evaluate new features through A/B tests. According to Statsig, what sets its service apart is that it enables software teams to run as many as ten times more tests than they can with other tools. The service provides that productivity boost by streamlining some of the more time-consuming aspects of the process.

“Data is the incredible bridge bringing teams together to quickly respond to customers and to answer key business questions,” said Madrona Venture Group managing director S. Somasegar. “Unfortunately, organizations still spend a lot of time wrangling data to make sense of it. In spite of the infinite cloud resources, prevailing analytics tools continue to inhibit the use of data for common product decisions that teams make every day.”

One analytics task in particular that Statsig promises to simplify is processing A/B test results. Statsig’s service automatically measures how a new feature influences a particular business metric, such as the percentage of users who click on an ad or average purchase value, and the results are then visualized in graphs. This removes the need for companies to set up a dedicated analytics environment to process data from feature tests.

For firms that require particularly fine-grained insights, Statsig provides the ability to not only determine how an updated edition of a product compares with the original but also test multiple versions of the updated edition. An online retailer considering to roll out a new “buy now” button to its website could experiment with multiple versions of the button. Statsig tests each version with a different set of users and analyzes the results to determine which button design increases sales the most.

Statsig says that, though it launched only a few months ago, early customers are already using its service to test features used by millions of consumers. The $10.4 billion funding round the startup announced this week will help it add more customers. 

“Statsig is going to be a transformational product for most technology companies,” said Sequoia partner Mike Vernal. “It enables product teams to operate quickly and decisively in a decentralized way by understanding the impact of the changes they are shipping.”

Image: Statsig