Treasure Data, which makes customer data software for enterprises, recently went independent and announced plans to expand its 20-country footprint. CEO and co-founder Kazuki Ohta speaks with Acuris Capital Intelligence about the company’s plans to unleash those funds for growth.

Interview by Josh Armstrong

Q. As you look to enter 10 more countries, how are you evaluating where to go?

In this space, 60% of the total addressable market is in the US, so we are hiring a lot of sales reps across the country and investing more in marketing there. Second is Europe and then APAC—a lot of the expansion is coming in those two regions.

Our solution roughly matches with GDP spend or overall marketing-dollar spend, so we are hiring more people in countries with higher GDP or where they have more digital adoption. For example, Malaysia doesn’t have the largest GDP, but their digital adoption is very high, as is the digital marketing adoption, so we’re going there as well.

Q. How do you plan to grow with your most recent capital infusion?

Our customers include the world’s largest brands, such as AB InBev. It’s important for our customers to collect and manage data across the globe, so we are using the money we raise to expand our footprint of employees so we can help these global brands. We are investing a lot of money in R&D, but if there’s a synergy with a company we would like to acquire, M&A is also an option.

Q. Speaking of M&A, how do you view that component of your growth strategy?

There are three types of acquisition: Team, team plus tech, and team plus tech and traction. As you move towards the third option, valuations tend to be much higher. At this point, I am open to all three options. I want to be customer-centric when it comes to acquisitions, and I’m looking for a partner, technology or team that already works with our 400 customers, so there is enough pre-existing synergy.

Q. What have you seen in terms of M&A pricing in the past year?

Last year had the highest multiples in the subscription-based, software-as-a-service model. Then, since last December, there has been a lot of compression, mainly on the public market side. It’s interesting that I haven’t seen any compression yet in private company valuations, but I would say they will be falling in the next two to three months. Right now, private companies valued between US$1 billion and US$2 billion are having a hard time sustaining their valuations, given the public company valuations.

A bit of background: Kazuki Ohta co-founded Treasure Data and began as chief technology officer in 2011. Its data management products are used by more than 450 organizations to engage with customers and understand their decisions. The company, previously part of Arm Ltd, raised US$234 million in November in a funding round led by SoftBank. The company is majority owned by SoftBank investment funds.

This interview has been edited for clarity and length.