By LAURA LOREK
Founder of Silicon Hills News
Spredfast announced Friday it has raised $32.5 million in venture capital led by Lead Edge Capital.
The Austin-based company makes a software platform that allows large companies to manage their social media postings.
The latest funds will help Spredfast market its product and add additional staff, said Rod Favaron, CEO of Spredfast.
“This is a very rich opportunity to take this platform a lot deeper,” Favaron said. “It’s a very exciting time to be doing what we are doing.”
Spredfast has 150 employees nationwide with 110 of those in Austin. It expects to hire 120 people this year and plans to expand internationally,
The investment deal with Lead Edge Capital also gives the company access to its portfolio companies which include Alibaba Group, Marketo, Bazaarvoice, Drillinginfo, Refinery29, and Monetate. Previous investors Austin Ventures, InterWest Partners, and OpenView Partners also participated in the round.
This is Spredfast’s Series D round of funding. The company, founded in 2008, previously raised $31.6 million in three other rounds. To date, Spredfast has raised $64.1 million.
Spredfast’s customers include clients General Mills, Whole Foods Market, HomeAway, REI, Discover, AT&T, Target, Rackspace, and AARP. More than 300 large companies use its platform to manage their social media. The companies have, on average, 120 employees dedicated to social media activity for 40 brands on 200 accounts.
“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,” Mitchell Green, managing partner, Lead Edge Capital said in a news release.
Last year, Spredfast reported tripling its revenue, but the privately-held company declined to disclose a figure. It also strengthened its partnership with Twitter in an offering that allows companies to target and deliver tweets by country.
The Spredfast platform supports a wide-range of social networks including Facebook, Twitter, LinkedIn, Google+, YouTube, Foursquare and Tumblr.
“Social is impacting every industry and every company in how they operate,” Favaron said.
Spredfast has developed a platform that allows those companies to manage their conversations with customers, he said. While there are a lot of little tools focused on one social network or one function, Spredfast tackles them all, he said.
With the Spredfast platform, 1,000 people can log on every day, Favaron said. With large public companies, there’s a lot of regulations on postings publicly and Spredfast’s platform addresses those regulations and makes sure a company is in compliance. The company has customers in banking and healthcare and lots of public companies use its platform, Favaron said.
“We treat every social network as a unique partner,” Favaron said. “What a business can do on these social networks changes every 90 days.”
Spredfast keeps up with those changes and lets companies know about interesting and rich marketing opportunities as they arise, he said.
“We take each social network and what it is great at and expose that to a brand,” Favaron said. “Everyone interacts on six or seven of them.”
But lesser traction social networks such as Slideshare or Flickr can be just as important to a brand, he said. Spredfast supports them all and configures its product for each particular brand.
The company operates in 25 countries right now and plans to expand even further internationally this year by opening an office overseas, Favaron said.
As for its future, Spredfast executives haven’t made a decision about taking the company public yet, Favaron said.
“Our focus right now is investing to take our product to the next level,” he said. “We’re working on growing our customer base and winning this market. If we do that well, we’ll have options.”
Spredfast also sees an emerging trend around companies “not broadcasting posts and tweets so everyone has a pile of junk in their news feed,” Favaron said. It’s helping companies strike a balance between making the consumer happy and giving the business a voice, he said.
“It’s all about targeting your marketing message to the 100 or 1,000 people that matter,” Favaron said. “It’s about finding those people who are big influencers for your business. There are people who are very passionate about what car they drive or what every airline they fly.”
Brands are shifting away from how many fans do they have to who are their fans and what do they are about, Favaron said.
Another big trend he sees is visual content, he said. Pictures and videos get a lot more online engagement than just text, he said.
Spredfast’s platform not only lets companies publish and promote content, manage conversations, but it also offers rich analytics and data which shows them everything from the demographic makeup of their fan base to whether a Tweet was successful, Favaron said.
“This is a very rich, deep wide market that is early. There aren’t a lot of people who understand how to do social marketing,” Favaron said. “Spredfast takes social marketing to a new level. We help companies create a collection of social networks with communities about people who care about their market and their company.”
