Social-Marketing Startup Spredfast Raises $18M
Four-year-old social-marketing startup Spredfast has raised an $18 million Series C funding round, a sign that the oft-predicted deflation of the social-media bubble hasn't yet come to pass.
Austin-based Spredfast had raised $15 million in two previous rounds and has 110 employees and roughly 250 customers including Whole Foods, Discover, Aramark, Caterpillar and Intuit. Its offering is aimed at big brands, designed to enable dozens or even thousands of employees within an organization to post from company accounts on Facebook, Twitter, YouTube, Google+ and LinkedIn.
Big deals in the social-marketing space like Salesforce.com's acquisition of Buddy Media and Radian6 and Oracle's purchase of Vitrue intensified pressure on some startups to find a buyer, but Spredfast's CEO Rod Favaron maintains he wasn't interested in an exit. The company launched its initial product in 2010 and determined early on that neither social listening nor page-management would be the key to building a business in the space in the long term, he said. Instead of making social media a place to blast out brand messages, Spredfast's intention is to carve out a new marketing function for clients by giving their employees -- both marketers and other job titles -- the tools to talk to customers directly.
"This is a multi-decade market," Mr. Favaron said. "It wasn't solved in 18 months."
Some clients are using Spredfast to give their social-media presence a more personal touch. For example, Whole Foods has its local marketing managers manning Twitter accounts for their stores, and some locations even have handles for their fishmongers or cheese sections. The food-service company Aramark uses Spredfast to let their campus representatives interact with college students.
"We see the consumer expecting more and more engagement from big brands, and we're trying to help them focus those conversations and drive results," said Spredfast CMO Jim Rudden.
While most Spredfast customers are big brands, the company's client list also includes AARP, which manages about 230 accounts at both a national and state level through the service. It's also used by Gannett publications, including USA Today.
Spredfast is not profitable. Mr. Favaron said he plans to use the new money to hire additional sales people and engineers.
The round was led by a new investor, Boston-based OpenView Ventures Partners, with existing investors Austin Ventures and InterWest partners also participating.