HootSuite raises $165M Series B, looks toward expansion
HootSuite has raised $165 million for its Series B round of financing. The company, which provides a social media management system, had raised a $20 million round last year from Canada-based OMERS Ventures. Today the company is adding Insight Venture Partners, who led the round, and Accel Partners to the list. [Disclosure: Accel is an investor in PandoDaily.] Earlier reports had the company raising a $50 million round at a $500 million valuation.
HootSuite CEO Ryan Holmes told me that the previous round of funding were 100 percent secondary, and that this one has a secondary component. The company, which is celebrating its fourth anniversary, has over 7 million users and is used in multiple countries around the world. According to Holmes, this round "just kind of came together."
He deems it a strategic investment given Insight's investment in Twitter, and Accel's status as the largest pre-IPO owner in Facebook. Holmes sees both investors as helping HootSuite continue to scale as it continues to grow.
In this vein, HootSuite has plans for more expansion with this financing. With offices in more than five countries, and the company plans to continues expanding. This includes office expansions in London, and looking into new markets like Latin America. As he sees it, social use is "voracious" in developing countries and it's time HootSuite staked its claim in that part of the country.
While the company wouldn't comment on its revenue, Holmes does say that growth over the last year has been incredibly strong, exceeding 300 percent in the last year.
The company also plans to deploy more money into its marketing budget. For the first three years, the company didn't spend any money on advertising, and focused only on social and community marketing. With this new investment the company sees itself looking toward other, more formal marketing avenues.
While there are numerous other social media platforms such TweetDeck (which was bought by Twitter a few years back) and Sprout Social, HootSuite seems to be the dominant player in this space. This also begs the question as to whether HootSuite will be scooped up by a larger company à la TweetDeck, but that doesn't seem to be a consideration any time soon.
For now, Holmes is focusing on expansion and making HootSuites product better for its enterprise customers: "Enterprise users want a simple, easy to use interface." And, according to him, that's what it plans on doing with this investment.