Lithium Technologies is going to make an honest company out of Klout this morning with an anticipated announcement of a $200 million acquisition. That’s according to a report from Fortune, after Re/code reported last month that Lithium was looking to buy Klout for at least $100 million. The deal is reportedly a mix of cash and stock, and Lithium is prepping for an IPO in the near future.
Klout’s recent business focus falls right in line with Lithium’s overarching goals as a social customer experience management software provider. Basically, Lithium helps businesses harness the power of social media to interact with their customers and drive sales and conversions, increase brand advocacy, and so on through social marketing, social commerce, social support, and crowdsourcing.
Founded in 2001, Lithium has raised $152 million altogether, including a $50 million round last September led by New Enterprise Associates. The company provides social customer experience services for more than 400 brands, including AT&T, Best Buy, Sephora, Skype, and more. Lithium is gearing up for an IPO, though it’s not clear when that’s going to happen. The $50 million raised last September was a “pre-IPO” mezzanine round. But Lithium also said that a $53 million round raised in January 2012 was also a “pre-IPO” round.
Meanwhile, Klout continues to truck on. The company has said it generated $10 million in revenue in 2013 and relaunched its website earlier this month to put more emphasis on better content sharing and creating original content that will be published “when people are listening.”
Klout’s algorithms measure the impact of a users tweets and shares to generate a Klout score that reflects how much social influence that person has. Businesses are getting in on the action to connect with the best influencers.
In the past, analysts and experts have questioned whether Klout’s business was anything more than ego-stroking. Why is social influence a product? What’s the business model?
And there have been glitches in the algorithm. At one point, tech blogger Robert Scoble had a higher Klout score than President Barack Obama.
The company has since adjusted the algorithm and right now, the top influencer is the POTUS himself, who displaced former title-holder Justin Bieber (who probably lost points when he turned into Prince Joffrey at some point during puberty). Other top 10 influencers of 2012 include LeBron James, Lady Gaga, Kobe Bryant, Mitt Romney, Tiger Woods, and Kanye West, among others.
Klout has raised $40 million since 2009 from Draper Nexus Ventures, Microsoft, Mayfield Fund, Crunchfund, Kleiner Perkins, KPCB Holdings, Greycroft Partners, Venrock, Institutional Venture Partners, ff Venture Capital, and more.