Since Groupon co-founders Eric Lefkofsky and Bradley Keywell created their investment fund Lightbank in March of this year, they have made three investments: $750K in travel application Where I’ve Been back in April, an undisclosed amount in Sprout Social in May, and an undisclosed amount in Betterfly in September. Word on the street is that Lightbank plans to announce Wednesday its most recent investment of just over $1 million in Sprout Social.
Founded in 2009, Sprout Social allows businesses to manage their social presences from a single dashboard, which provides real-time data on their Facebook, Twitter, LinkedIn, and Yelp accounts. The site was in closed beta until August, and since going live, it has reportedly connected its clients with over 567,000 potential customers via social networking.
Of the rumors, Sprout Social president and CEO Justyn Howard said in an email: “I can confirm that they are making a second investment in our company for that amount through Lightbank,” referring to Eric Lefkofsky and Bradley Keywell.
Lefkofsky and Keywell similarly confirmed with the Wall Street Journal that they are not only investing in Sprout Social for a second time, but that this time the amount is just over $1 million.
When Lightbank was created back in March, Lefkofsky and Keywell explained that the fund is neither a seed fund nor a venture fund. “We invest money, but we do it our way,” the fund’s tagline touts. Simply put, it is a $100 million fund that promises to invest $1 million or less per deal over the course of ten years.
The fund’s first investment was a $750K round in the travel application, Where I’ve Been, which allows users to chart their travels as well as future destinations. The Where I’ve Been Facebook app currently has over 1.3 million monthly users. The fund’s second investment was in Sprout Social, and the third was an undisclosed amount in Betterfly, a New York-based startup that helps users find the right individual from a particular service provider, such as a specific hair stylist or instructor.
It is believed that the fund’s previous investment in Sprout Social was under $1 million. The company plans to announce its product’s new integration with location-based services Foursquare and Gowalla, which will allow merchants to receive text messages when a customer checks-in at their business, WSJ reports. Through the Sprout Social dashboard, merchants can send customers a welcome tweet or reward. There has also been speculation that the social service will also partner with Groupon to help businesses target nearby patrons. “There are some alignments with our businesses for sure, but nothing is formalized,” Howard told WSJ.
