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Social media marketing company Spredfast raises $32.5M

Funding came from Lead Edge Capital, Austin Ventures, InterWest Partners, and OpenView Parnters

Financial trends and news by Steven Loeb
January 3, 2014 | Comments
Short URL: http://vator.tv/n/3424

(Updated to reflect comment from Spredfast)

Social media has become an extremely important tool for brands to stay in sync with their customers. Of course, even as an individual, having a lot of accounts across the web can be overwhelming, so imagine how hard it is for a company with thousands of followers and posts every day.

That is why a number of companies, notably Hootsuite, have popped up to help these brands manage their accounts without breaking a sweat.

One such marketing company, Spredfast, has now raised $32.5 million in new funding, the company announced on Friday.

The round was led by Lead Edge Capital, with previous investors Austin Ventures, InterWest Partners, and OpenView Partners also participating in the round.

The company had previously raised over $31 million, including $12 million from InterWest Partners and Austin Ventures in 2011, and then another $18 million from OpenView Venture Partners Austin Ventures and InterWest Partners in February of 2013. This round brings the company's total funding to $64.1 million.

The new money will be used to accelerate growth through hiring, product development and global expansion.

"We plan to hire more than 100 people in 2014 in virtually every department," Jim Rudden, Chief Marketing Officer at Spredfast, told me. 

While he could not tell me to which countries Spredfast specifically was looking to expand its presence, Rudden did tell me that the company currently has customers operating social accounts in over 25 countries. 

Founded in 2008, Spredfast allows brands to manage their presence across major social media platforms, including Twitter, LinkedIn, Facebook and Google+. They can build, and maintain, relationships with customers through a single dashboard.

"Using Spredfast, brands are able to attract the right audience, stimulate engagement, leverage each member of the social team and connect social activity directly to a brand’s business goals," Rudden said.

"We help them manage in one place tens of thousands of social interactions across thousands of employees and social accounts - all while millions of followers are watching."

It is currently used by over 300 brands, including General Mills, AT&T, REI, Discover, AT&T, Target, Rackspace, and AARP.

Spredfast recently deepened its partnership with Twitter through integration of new functionality that enables brands to target and deliver organic tweets by country.

The Austin, Texas-based company also revealed that, in the past year, it saw its revenue triple.

“This is evolving into a huge market. Every enterprise in every industry can leverage social to grow their business. We are now in the next wave of social business, and we are succeeding because of our single mission,” Rod Favaron, CEO of Spredfast, said in a statement. “Our customers rely on us to innovate and give them the tools they need to market and manage relationships on social with those who matter most, their customers."

The social marketing space

As I mentioned earlier, Spredfast is one of many similar companies to offer brands the ability to manage their social media.

The most notable is Hootsuite, which raised a $165 million funding round in August, bringing its total capital to just under $187 million.

Hootsuite has more than 7 million users in nearly every country around the world and its customers include PepsiCo, Virgin, Orange, Sony Music, Telus, HBO, WWF, UPS, Panasonic, and 237 of the Fortune 500 companies.

Other notable competitors include:

  • Engagor, a Belgian company that was founded in 2011, that has some very big name clients, like McDonalds, Red Bull, Coca Cola, Pepsi, Volvo, T Mobile, Ikea and Microsoft. The company recently raised $2.6 million in Series A funding led by Hummingbird Ventures.
  • Sprout Social, which raised $10 million in Series B venture funding led from New Enterprise Associates (NEA) in 2011. Some brands that use Sprout Social include Yahoo, McDonalds, Pepsi, Yammer, Nokia, and President Obama's 2012 campaign.
  • Extole, a company that allows brands to offer rewards to customers in return for them referring said brand to their friends. Extole’s total funding raised to date to $29.6 million, including $7.6 million from Shasta Ventures, Norwest Venture Partners, Redpoint Ventures and Trident Capital in January of last year.

But when it comes to competition, there is probably only one other company that it truly has to worry about: Salesforce, which has purchased two big social media marketing companies in the last two years.

First it bought up social media monitoring platform Radian6 for $326 million in March 2011, then it purchased Buddy Media, which creates social media analytics for brands, for $689 million.

Salesforce has over 100,000 customers, including GE, NBCUniversal, Chipotle, Wells Fargo, Facebook, Virgin America, Blue Shield of California, and the cities of San Francisco and Boston.

To Rudden, the biggest competitor to Spredfast is marketing clouds, such as SFDC and Adobe.

"While there are many individuals tools for specific problems in the market, there are only a few of us building software platforms focused on the needs of large enterprises and the agencies that support them," he said.

So what separates Spredfast from the others in the space?

"Unlike our competitors, our sole focus at Spredfast is to create the most robust, reliable and preferred social relationship platform for our current and future customers, day-in and day-out," he said. "Our focus allows us to keep pace with this market. The social networks are rapidly evolving their platforms - the Marketing Clouds are not able to keep up."

Ultimately, the philosophy behind Spredfast is to allow brands to have "an incredible opportunity to build lasting relationships with customers through social."

"As consumers increasingly choose social to engage, we believe the companies that are focused on building a relationship and delivering value through social activity will significantly outperform companies that are treating social as a one size fits all broadcast medium," said Rudden.

:There is a lot that goes in to coordinating, publishing, engaging and analyzing social content and interactions at large enterprises. Spredfast is at the heart of making that all work."

(Image source: http://www.spredfast.com)


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