Social-Marketing Startup Zuberance Raises $8.2 Million Second Round

Tools to Help Marketers Cultivate Their Biggest Fans

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SAN FRANCISCO (AdAge.com) -- Zuberance, a Santa Clara, Calif.-based startup that helps marketers identify their biggest online fans and helps them spread the word as "brand ambassadors," just landed a $8.2 million second round of funding led by Canaan Partners. The company plans to use the funds to expand their tech platform for word-of-mouth marketing.

The announcement comes days after VC firm Kleiner Perkins Caulfield & Byers teamed with Amazon, Facebook, Zynga and Comcast to create a $250 million venture fund for social startups.

"We're a technology company," said Zuberance CEO Rob Fuggetta, adding that his clients include BlackBerry, JambaJuice, 24HourFitness, Symantec and Chili's. "We've been a low profile company during Series A. We got $4 million in 2008. Now we're going to start building awareness."

Essentially, the Zuberance platform helps a company identify customers who are willing to talk about it online. So, for example, Zuberance will ask through different channels, such as Facebook, Twitter or Chili's website, "How likely are you to recommend Chili's to a friend?" Once they are identified, those people who answered "yes" are provided with Zuberance-created tools customized for the brand, including discount offers and coupons.

The brand advocates can create content to be published online, and the actions of those people are tracked both online and off. If a coupon is taken into a Chili's, the bar code on that coupon will tell Chili's with whom it originated. Then Chili's gets a report on exactly what the advocates have done and the results of those actions.

Once a client signs up with Zuberance, they pay a monthly flat fee that gives them unlimited usage of the platform - for now. "We're exploring other types of business models," Mr. Fuggetta said.

The brand advocates are not paid for their efforts. "That would be inauthentic, wouldn't it?" Mr. Fuggetta said. Rather, they are given incentives to keep doing what they're doing. A restaurant, for example, could ask its fans to write a review, or give its fans coupons to share with ten of their friends.

Obviously, Zuberance is not the only business interested in brand ambassadors. Companies such as Bazaarvoice and even Facebook are in the space. "We are not a Facebook app," Mr. Fuggetta said. "And Bazaarvoice is more about products and we're about people, but some of our clients like Intuit use both us and Bazaarvoice."

What makes Zuberance different, said Canaan Partners fund leader Deepak Kamra, is that it can track return on investment. "We like the feedback involved in the loop," said Mr. Kamra. "We like how we can keep track of acquiring customers for the brand, how we can keep track of clicks on reviews."

Mr. Kamra said that most big brands are coming out of an era of experimental budgets in social media, so the social media marketing budgets are growing. "You see a deal like this and you think, 'Can this company be a billion-dollar company?' I think so, yes."

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