Two years ago, they had to lay people off and change the way the company operated. Now, sales are growing at a rate of 80% per year. “With the advent of AI, the appetite for data has never been greater. We see this as a golden opportunity to make a real impact on the world,” says Jan Čurn, founder and CEO of Apify, a data scraping and extraction start-up, about its new CZK 70 million investment.
When a lot of people hear the word "scraping," they tend to think that it's an activity that borders on the illegal. Overloading websites, vacuuming databases. What’s the real story here?
Scraping is a way of extracting data from a website. The biggest scraping company in the world is Google, which scrapes the entire internet to perform searches. While it may have a negative connotation for someone, it’s actually a very positive thing. We live in a digital economy, business is done online, and data is power. The more data a company has, the better the decisions and products it can make. The web is the greatest source of data that humanity has ever built, and we are enabling people to access that data and useit in meaningful ways. The internet is an open platform, and while some big players are trying to lock it down, scraping keeps it open for everyone. It is perfectly legal and above board, as long as it’s done correctly. The challenge here is that the web is primarily designed for human consumption, not machines, and that’s where you run into difficulties.
What’s the technological challenge and what makes your tools unique?
As the web evolves and grows more sophisticated, scraping becomes more complex. You often need to use a full-blown browser because, forexample, content is dynamically rendered for the user, loading on the fly. You need to run thousands of browsers in parallel and maintain a queue to download millions of pages. And you’re up against the fact that many sites are trying toprevent you from scraping their content. To get past their security, you have to trick them into thinking you’re a human using a personal computer. As blocking systems get better at detecting robots, we are coming up with very creative solutions to out smart them using machine learning. If developers had to deal with this themselves, it would take forever. Companies need data, but they don’t want to figure out the technical details of scraping themselves, so they leave it to us.
How widespread is the use of scraping - who are your customers?
We currently have 2,500 regular customers, ranging from Fortune 500 corporations to individuals and very small start-ups. The most common use case is probably still e-commerce. Vendors want to know what is being sold, for how much, and where. Scraping creates more competition, as moste-commerce companies keep an eye on each other. Other key are as are marketing and social media. The big social media networks often don’t have APIs, and companies are interested in what’s being talked about, what reviews they’re getting, how their communications are performing, and other things like that. Our Facebook, Instagram and TikTok scrapers are very popular. By the way,that’s why we’re called Apify – we help you apify sites that don’t have an API.
How else can it be used?
Lead generation is another major area. Companies need leads, and there is no greater source than the web. Online maps, for example, can provide you with targeted links to businesses in a particular location. Then there’s SEO. It’s important for businesses to know how they rank in Google Search, but there is no API to tell them that information. In addition, many customers are dealing with legal compliance, because they need to be able toprove that their site looked a certain way at a certain time. This includes creditcard companies and other highly regulated industries.
Has the rise of artificial intelligence had any impact?
It goes without saying that AI is a hugely expanding source of revenue for us. All large generative AI models are trained on large amounts of data scraped from the web. Therefore, the proliferation of AI technologies logically increases the demand for data, whether to train models or to feed them with data for Retrieval Augmented Generation (RAG). In this area, for example, Intercom – a global customer service leader – uses us for its AI chatbots, because they need to befed data from customers’ websites in order to answer questions correctly. Ingeneral, this is an area of AI data that we’re really excited about, and we’re working hard to be a market leader in it.
Are there other ways to use Apify?
We’re often surprised by the ways people use Apify. For example, we work with Thorn, a US-based non-profit organization that helps the police to find victims of human trafficking. We pull data for them from American portals offering erotic services, and if a missing child or teenager appears on them,they can find a match through photos. A few years ago, they claimed to have found over 17,000 victims this way. Be sides helping companies to make more money, scraping can also benefit society as a whole. One example in the Czech Republic is Hlídač státu (“Government Watcher”). Because some government agencies don’t have APIs, scraping is the only way to retrieve and review their contracts and documents.
You also offer web-based process automation. Is that a separate product?
Our platform is quite flexible, and data pulling is actually a subset of automation. For example, to find the data you need, you may have to click through some forms. And then there are customers who don’t need to retrieve databut want to click through forms. One example of this is Rocket Money, a US service that helps people to save money. They analyse bank statements and, with our help, make it easy to cancel various unnecessary subscriptions to different services. Again, there are a lot of different applications.
In 2022, Apify got a makeover and was on the hunt for a new identity. What’s your status today?
Two years ago, there was a sudden drop in our turnover, so we had to cut back and reduce our staff. We pivoted, narrowed our focus, and figured out exactly what we wanted to do and who we wanted to do it for. They say the most important thing for a start-up is focus, but when you’re doing well and growing, you kind of lose sight of that. It was only when we had to look for savings that we focused on what would bring the most value to our customers. That really helped us to move forward. We decided that our target audience was developers and that we wanted to be the best web scraping and automation platform that they could use. We dropped everything else. In the last quarter of 2023, we saw an 80% increase in turnover compared to the previous year. Of course, the whole market has changed and the AI revolution has arrived, but those tougher times really made us get our act together.
Why did you decide to take on this investment now?
We’re profitable, so we don’t need the cash to operate. We want to move the company from a profit-driven mentality to a growth mindset. The idea is to invest with confidence, to have a bigger buffer, and not to have to count every last penny. We want to show that we can keep up the momentum and turn money into scalable growth. If we can make that happen, we’ll have the potential to make a real impact on the world.
What specifically will you use the money for?
First of all, we’re expanding the team. We need to hire more developers, people for the product and data team so that we can move faster on the product roadmap. We have big plans that we want to bring to market earlier and faster. We’ll also be looking at marketing. We think our products have enough going for them now to appeal to a lot more companies than we’ve already got on board. We just need to make them aware of our presence. Our main source of new customers is organic traffic, but we’re now going to be spending more on paid advertising and other channels.
Why did you choose J&T Ventures as an investor?
We thought about doing a big investment round where we would approach a lot of companies across the market, but in the end we decided to do as maller round so that we don’t disrupt the business too much with a lot of outside capital. So we chose a strong local partner that we know and trust.
J&T Ventures has a great reputation. We’ve heard nothing but good things about them, and we’ve known Martin Kešner for years. Our other investor is Reflex Capital, but together we only raised about $500,000 between 2016 and 2019. So we’ve basically funded Apify ourselves so far, and we didn’t feel it was the right time to raise hundreds of millions of crowns. Maybe a little bit further down the line.
