Social media management startup HootSuite recently announced the finalization of a whopping $165 million in Series B funding in a round led by Insight Venture Partners with additional participation from Accel Partners and OMERS Ventures. HootSuite is one of the five vendors initially selected by Twitter as Ads API Partners to enable customers to manage advertising campaigns from within the HootSuite platform instead of logging into Twitter. Additionally, HootSuite uses its dashboards and analytics to enable brand management across other social networks such as Facebook, LinkedIn, Google+ and Foursquare. The company recently announced revenue growth of 300% for Q2 of 2013 in comparison with Q2 of 2012, over 7 million users worldwide and integration with 56 applications.
As a result of the investment, Jeff Lieberman, Managing Director of Insight Venture Partners, Ryan Sweeney, Managing Partner at Accel and John Ruffolo, CEO of OMERS, will join HootSuite’s board of directors. HootSuite’s finalization of Series B funding builds upon previous funding rounds of $1.9M and $20M that brings the total funding raised by HootSuite to $187M. The funding will be used for global expansion that includes hiring resources in Latin America and Europe. The investment may also be used to finance strategic acquisitions in the social media management, dashboards and analytics space. In an interview with TechCrunch, HootSuite CEO Ryan Holmes noted that the funding round takes the pressure off the company to prematurely evolve into an IPO or an acquisition.
HootSuite is currently “cash flow neutral” and, according to Ad Age, charges “enterprise clients anywhere from five figures annually up to the high six figures.” A recent article in Business Insider by Jim Edwards estimated that HootSuite’s revenue is anywhere between $50 million and $200 million based on some back of the envelope calculations that include the data point that the company has 246 Fortune 500 customers as noted by CEO Holmes in an interview with Bloomberg. Since HootSuite’s revenue is a fraction of Twitter’s advertising revenue, Edwards intuited that it would not be unreasonable to conclude that Twitter’s advertising revenue is on the order of $1 billion. As rumors of Twitter’s IPO proliferate and Facebook’s share price passes its initial IPO price, the industry should expect HootSuite to consolidate its early traction in the Twitter and Facebook advertising space. The company’s roster of customers includes PepsiCo, Fox, Sony Music, the National Hockey League (NHL) and Thermo Fisher Scientific Inc.