MC Hammer didn’t invent parachute pants, but he switched up the game.

What started as nylon slacks imbued with countless zippers became a loose set of low-riding billowy trousers—perfect for his frenetic form of hip-hop dancing. But don’t call them parachute pants. They’re Hammer Pants.

Customer data platforms have also been “hammering” out their own unique style in the digital stack. In 2018, I was at a Boye & Company CMS Experts meeting in Boston—and during one of our group presentations, a colleague postulated that CDPs were now the center of the digital stack.

Stop. Hammer time. The center?

That’s right. And there was some pretty decent rationale, specifically around the word “data.”

CDPs might feel more new wave than CMSes, but we can trace their roots back over the last two decades with the advent of key marketing technologies. This includes the rise of CRMs, customer data management tools, and more—all of which led to a high degree of martech fragmentation.

When marketing analyst David Raab coined the term “customer data platform” in 2013, he canonized it as an industry category. In his mind, this new breed of software had established independent value, gathering customer data from a wide range of sources and using predictive analytics to guide marketing, sales, advertising, and other customer-facing systems.

In the years that followed, CDPs got smarter. They expanded their potential to unify customer data and optimize the timing and targeting of marketing messages and customer engagement activities—all buoyed by AI-powered analytics fed by individual-level customer behavior.

Then came the Gartners and Forresters of the world, tracking growth across the CDP space. This was followed by the rise of digital experience platforms, with an analyst mandate for “completeness of vision.” The DXP framework necessitated an integrated data and analytics layer for powering experimentation and personalization in comprehensive, enterprise-grade marketing clouds.

Throughout the pandemic, DXPs did the “CDP Dance.” Acquia acquired AgilOne, HubSpot hoisted PieSync, Sitecore snagged Boxever, and Optimizely overtook Zaius. This past January, I covered Contentstack’s purchase of Lytics, the first major acquisition by the headless-CMS-turned-composable-DXP, and a signal that the digital experience platform space was evolving.

Meanwhile, market-leading platforms like Segment were absorbed by the monstrous Twilio—and the equally Goliath-sized Adobe launched its own real-time customer data solution. Demand was clearly growing, and platforms were consolidating their power.

Now, as we roll deeper into 2025, the CDP space feels in flux. There's still an urgent need to collect, process, and activate data for marketing, and generative AI is pumping up the volume around productivity. But when 90% of marketers say they’re unhappy with their CDP (and many still don’t know what it is), it's time to face the music.

Is CDP dead?

After breaking the Contentstack/Lytics news, someone in one of my community Slack channels asked: “Does anybody actually want to be a CDP anymore? Is the category dead? Real question.”

Dead? No. It’s 2 legit 2 quit. But there might be a reason why stand-alone CDPs have struggled, and it comes down to one simple challenge: delivering value. Unfortunately, many tools have stymied their adoption with rigid data requirements, long implementation times, limited use cases, and—worst of all —significant security concerns.

Despite these challenges (and the long streak of consolidation), some platforms are still driving innovation and unlocking value with AI. You might even say they’re wearing Hammer Pants.

One of those is Hightouch, a composable CDP that also positions itself as an “AI decisioning” platform. Today, the company announced that it has raised an $80 million Series C investment, putting it at a $1.2 billion valuation. Led by Sapphire Ventures, this latest round brings Hightouch to a healthy $172 million in total funding. Not too shabby.

According to Hightouch, this investment will help drive demand for the company’s AI Decisioning product, a sophisticated tool that leverages AI agents to deliver personalized marketing experiences. AI Decisioning, along with Hightouch’s composable CDP, has enabled the company to more than double revenue in the last year—adding notable enterprise customers like PetSmart, Spotify, and Accor Hotels.

“We’ve talked about 1:1 personalization for years, but it’s not possible with the way marketers work today,” said Tejas Manohar, cofounder and co-CEO at Hightouch. “Everything is too slow, too manual, and usually results in customers receiving a blizzard of irrelevant communications. Our vision is to use AI to help marketers break free of manual work.”

As Manohar explained, Hightouch is “reimagining” the marketer’s job by enabling agents to assume much of the heavy lifting. Users can move beyond the limitations of structured calendars and static, impersonal journeys. You can simply prompt goals like “Drive repeat purchases and subscriptions,” and Hightouch’s agents decide what to do at a 1:1 level.

Under the hood, Hightouch’s composable posture allows for greater flexibility, turning a company’s existing cloud data warehouse into the foundation of its CDP. This effectively eliminates the pitfalls of traditional customer data platforms, providing a fast and secure implementation that avoids redundant tech in the stack.

According to Hightouch, this is a key activator for their rapid growth as a standalone CDP in a market where demand continues to scale, but preference is shifting to composable solutions.

Driving CDP evolution with Agentic AI

Like parachute pants, our industry is replete with fads. The trick is to focus on delivering value, and it seems like Hightouch has been assembling the right mix tape for its boom box.

Founded in 2018 by Josh Curl, Kashish Gupta, and Tejas Manohar, Hightouch’s origin story is an interesting one. Originally conceived as a travel booking Slackbot, the company pivoted after developing reverse ETL technology to sync data from warehouses to SaaS tools.

Since then, Hightouch has been enabling organizations to transform high-value data assets into actionable insights and strategies—all without the need for extensive engineering. This is accomplished through an elegant suite of no-code features that make data activation easier, so almost anyone can build audiences, orchestrate customer journeys, and uncover customer insights.

As generative AI opened up, Hightouch chased the same revolutionary benefits as everyone else. But as their team shared with me, the focus has been more on “What can we make?” and less on “What should we do with what we make?” That latter question became the essence of its AI Decisioning product.

To power this engine, Hightouch is using agentic AI and reinforcement learning to create a fundamentally new way for marketers to operate. Rather than creating audience segments and pre-defining customer journeys—whether through self-serve tools or AI-assisted chatbots—marketers can define the goals they want to achieve, apply content variants, establish guardrails, and let AI decide how to best reach those goals for every single customer.

This can work with traditionally generated content or with the most cutting-edge generative AI. Either way, AI Decisioning will harness that content to deliver 1:1 personalization that works to achieve the stated business goals.

Powering marketers with AI Decisioning

For decades, enterprises have spent millions on marketing technology and innovation, but we keep making the same mistakes. Even now, we send broad segments of customers pre-scheduled offers and content that aren’t relevant 99% of the time. It’s a consequence of pre-planning communications to large audiences, and existing tools haven’t cracked the code.

AI Decisioning is a sea change in the marketing paradigm. Instead of pre-planning every experience using rigid rules and timing, marketers can simply assign a goal like “Re-activate these lapsed customers,” and then observe as AI agents use approved content to deliver a personalized stream of communications to every single consumer. Relevancy skyrockets—and so does campaign performance.

AI Decisioning packs a value punch on multiple levels. First, it finely targets individual customers, moving beyond the limits of broad segmentation. It’s able to personalize content at scale for each user and optimize message frequency and timing to help maximum impact. It also automates the testing process, eliminating time-consuming manual A/B testing while orchestrating experiences across channels like email, SMS, apps, and web.

There's a nice product demo you can check out here:

At its core, AI Decisioning is a neutral technology that functions with all existing enterprise data and marketing platforms. It can sit on top of any data warehouse or CDP and trigger actions across any marketing or digital platform – including Salesforce, Adobe, Iterable, and Braze.

AI Decisioning combines multiple ML models to determine the best outputs and automatically runs high-scale experiments to learn what works best. According to CTO Josh Curl, the company is quickly adding support for more channels, such as offers, promotions, web, and app experiences.

As I mentioned previously, AI Decisioning has changed the calculus for Hightouch, ballooning their revenue over the past year. Enterprises are embracing the tool to achieve longstanding goals that have been difficult to achieve with traditional methods. One of its customers, WHOOP, recently shared that they learned more in six weeks of using AI Decisioning than they did in a year of manual experimentation.

“The top use case we’re seeing is driving loyalty and frequency,” said Kashish Gupta, cofounder and Co-CEO of Hightouch. “It’s harder than ever to drive relevance and we believe agentic AI is a solution.”

Tackling data security and trust

Trust is a huge factor when it comes to customer data (or any data for that matter). It’s not enough to have a “walled garden” in a world where APIs move data everywhere. Stand-alone CDPs have been challenged by the ever-growing regulatory and compliance requirements driving data security policy—and this is one area where a large-scale acquisition can shore up trust.

Hightouch has been keenly focused on the issue, especially for customers in regulated industries and those straddled with municipal governance like GDPR.

First and foremost, Hightouch isn’t storing any of its customer’s data. They operate within a customer’s data infrastructure and any of the major cloud providers—allowing them to inherit all data governance and permissions from those sources. This gives admins and security teams robust layers of control over who can access specific data for each use case. This type of layered security and control has helped its customer Accor partition data access across dozens of brands and more than 110 countries with differing data regulations.

Hightouch is also accommodating for the “human in the loop.” AI agents, while incredibly useful, are still nascent and prone to issues. As such, the company has built multiple insight layers into its AI Decisioning platform, enabling marketers to see the decisions being made—both in the past and projected into the future—and divine why AI Decisioning is choosing each variant for each customer.

Why it matters

“Does anyone actually want to be a CDP anymore?”

I dunno. Does anyone want to be a CMS anymore? Or a DXP? These are crowded spaces with a lot of chaos swirling. And yet, we keep seeing new platforms emerge in a red sea, searching for a pool of blue ocean.

Categories are both a gift and an albatross, and this question reflects the existential challenges in every layer of the digital stack. But it also presents the right players—the visionaries—with an opportunity to reinvent the value of their vertical.

That’s exactly what Hightouch is doing with its AI Decisioning. In essence, they’re rewriting the value playbook for a standalone CDP through the AI lens and taking a novel approach. I’ve been carefully tracking the rise of AI agents (we have a story coming on it later this week), and leveraging these smart bots to streamline the marketing burden and enhance brand relevancy is a huge idea.

Another check in Hightouch’s box is its composable story. By architecting core flexibility and adaptability across its tooling, it is providing extensibility for composable enterprise stacks in ways that other traditional platforms—and even integrated solutions—might not be capable of delivering.

Let’s talk use cases. Obviously, high-volume SMS and email campaigns might prove risky as a first brush with any agentic-driven CDP solution. So if you’re considering a pilot with Hightouch, you might want to target a customer behavior or audience where your normal campaigns aren’t moving the needle (think lapsed or soon-to-churn customers). Hightouch recommends carving off a portion of that audience and seeing if AI Decisioning can find a better way to achieve your goals – then leverage the inherent observability to gauge performance and optimize.

One of the benefits of how AI Decisioning is architected is that it’s not “all-or-nothing.” It can live right alongside traditional batch and blast campaigns and pre-existing customer journeys, so this helps further mitigate the risk.

I asked the Hightouch team about what’s next, and they have an ambitious roadmap—one where AI Decisioning integrates more deeply with major LLMs, ties into the native AI offerings of cloud providers like Snowflake, Databricks, and Google BigQuery, and even goes more multi-channel. It also speaks volumes that the company recently hired analytics legend Adam Greco as its product evangelist—a sage move, in my opinion.

Is AI Decisioning the ultimate tool for shaping the customer experience? Is this the future model for the standalone CDP? It’s hard to say. Agentic AI is still blossoming, and we’re asking a lot of this technology. That said, I think we'll inevitably see it everywhere.

One thing is certain: Agentic AI will require human oversight in the near term. But marketing needs help—and the potential to automatically determine the best marketing messages is a bold vision that might just hammer out the competition.

Looking for guidance on Hightouch? Talk to an expert.

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News

U Can’t Touch This CDP: Hightouch Nails $80M Series C to Power its AI Decisioning