Spredfast announces today a new round of funding, $32.5 million, led by a new strategic investor, Lead Edge Capital, the investors behind Marketo, among others. This latest round is nearly twice the amount of its most recent (February 2013) round of 18 million dollars. I caught up with Rod Favaron, CEO, earlier this week to discuss the latest news and what it means for one of the major (and remaining) independent providers of social media management software and services.
"We're going to be spending a lot more on the product," with new developers hired mainly in Austin, and they'll be announcing soon the launch of several overseas locations. "With major global brands like British Air, we've made a promise to open offices closer to home, and we'll be delivering on that promise."
Even with the new funding, how does he feel about competing against such enormously deep-pocketed competitors like Salesforce, which acquired BuddyMedia in 2012, and Oracle (Vitrue)? Not to mention enterprise vendors like SAP, Adobe, Hootsuite and others who are growing and acquiring more and more pieces of the SRP (Social Relationship Platform) puzzle.
"My sales force has a big grin on its face when they're competing against Salesforce" and other vendors. "If we look at the rate of change in this market, for example with Facebook, what you can now do, our competitors simply can't move as quickly as we can.... Buddy was state-of-the-art when Salesforce bought them, but the platforms (Facebook, Twitter, etc.) are moving at 100 miles per hour. Buddy Media was more competitive seven quarters ago."
Spredfast is focusing its innovations on two major areas: leveraging the targeting now more available from Facebook and Twitter, and with it the ability to promote content discovery and sharing, with more solid metrics of engagement, not just "likes" and fans, that build a solid rationale for content marketing.
In a larger sense, the investment signifies solid interest in the SRP space after some bad news in 2013 with the collapse of Syncapse, and greater challenges from customers to prove ROI.
As Favaron notes, "You look for evidence along the way, our growth rate, the horizontal nature of the market, and (the quality of the) people involved and you know that this is going to be a very big deal for a long time." How big? "If we look at email market, we believe that social in 10 years is as big as email." So at least $2.5 billion big.
Here's the release:
Spredfast Secures $32.5 Million in Growth Capital
Lead Edge Capital joins existing investors Austin Ventures, InterWest Partners and OpenView Partners as Spredfast solidifies position as the leading social relationship platform provider
AUSTIN, TEXAS - January 3, 2014 - Spredfast, the leading independent social relationship platform provider, today announced that it has raised $32.5 million in growth capital led by Lead Edge Capital, which has funded well-known software, e-commerce and internet companies including Alibaba Group, Marketo, Bazaarvoice, Drillinginfo, Refinery29, and Monetate. The majority of Lead Edge's investors are current or former senior-level Fortune 500 executives, successful entrepreneurs, and leading public market investors. Upon investment, portfolio companies are given full access to Lead Edge's limited partners to help them grow faster. Previous investors Austin Ventures, InterWest Partners, and OpenView Partners also participated in the round.
The capital will be used to accelerate Spredfast's aggressive growth trajectory through talent acquisition, product development and global expansion, and solidify its position as the leading independent social relationship platform provider in the world. More than 300 enterprise brands including General Mills, AT&T and REI use Spredfast to manage their strategic social programs. On average, these companies have nearly 120 employees managing social activity for 40 brands or initiatives across 200 accounts. Their dynamic social programs require enterprise-class technologies that enable them to build and maintain relationships with customers.
"Spredfast has catapulted into a market leadership position and its extensive client roster is a testament to that. We have tracked this industry for a number of years and we know that Spredfast is poised to win this market. They are truly an integral part of every business' daily operations," said Mitchell Green, managing partner, Lead Edge Capital. "We look forward to being a partner to Spredfast and are excited to work with the entire team as they enter this next chapter."
This round comes on the heels of a record year for Spredfast. Recent milestones include:
- Revenue tripled year over year from 2012 to 2013.
- New customer acquisitions of marquee enterprise social brands including General Mills and REI, and strengthened existing relationships with clients including Discover, AT&T, Target, Rackspace, and AARP.
- Deepened partnership with Twitter through integration of new functionality that enables brands to target and deliver organic tweets by country.
- The only open enterprise SRP on the market with strategic integrations with leading social products like Kenshoo Social, Brandwatch, and Bazaarvoice which allow brands to amplify their paid, earned and owned media programs from a single platform.
"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," said Rod Favaron, CEO of Spredfast. "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. We are thrilled to have the support and confidence of our new and existing investors as we accelerate our growth."
Based in Austin, Texas, Spredfast provides a social relationship platform that empowers enterprise brands to build lasting relationships by creating great social experiences. Spredfast enables more people, in more places, to engage in more conversations from a single software platform on supported social networks like Facebook, Twitter, LinkedIn, Google+, YouTube, Foursquare, and popular blogging platforms. Some of the enterprise and agency adopters on board with Spredfast include AT&T, Jason's Deli, Warner Brothers, Whole Foods Market, AARP, AGAIN Interactive, Coty Beauty, HomeAway and Ogilvy. For more information, visit www.spredfast.com
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