Austin-based Spredfast raises $18 million for expansion
Feb 05, 2013 (Austin American-Statesman - McClatchy-Tribune Information Services via COMTEX) --
As more corporations use social media to interact with customers, they're realizing they need a way to manage the process.
That trend is driving growth at Austin-based Spredfast, which sells software that lets companies manage their efforts across multiple social media sites including Facebook, Twitter, LinkedIn and YouTube.
The company, which signed 100 new customers in the past year including AT&T, Caterpillar and Starbucks, said Tuesday it has raised $18 million to accelerate development and expand its workforce.
Spredfast has 110 employees, up from about 60 a year ago. It plans to add another 50 employees this year, and is currently hiring in development, sales and marketing.
To accommodate its expansion, the company is moving in May to larger downtown offices at 200 W. Cesar Chavez from its current space at 412 Congress Ave.
The lead investor in the funding round was Boston-based OpenView Venture Partners, with participation from Austin Ventures and California-based InterWest Partners. Spredfast, founded in 2008, has raised a total of $33.6 million.
Spredfast's software lets clients manage campaigns and conversations across a wide range of social media outlets and blogging platforms. Rather than going to each social site, Spredfast lets users publish and monitor social activity from one central platform.
CEO Rod Favaron said companies are investing in Spredfast's tools because the way they are using social media is changing.
"It used to be you'd put up a Facebook page and listen to what people were saying about your brand. Now it's a place where you have conversations," he said. "People don't pick up the phone and call you if they have a problem, they Tweet it, and they expect a thoughtful response."
Spredfast has 250 customers, including Starbucks, Whole Foods, Warner Brothers and T. Rowe Price. The company doesn't disclose financial information, but Favaron said revenue grew 400 percent in 2012 compared with the year before.
Favaron said Spredfast corporate customers have anywhere from 100 to 1,000 social accounts, which are managed by multiple employees often spread around the world.
"It gets complicated pretty quickly when you're launching products and holding events and answering questions for every product at the same time," he said. "We let you do all of your commenting and interacting from one place, while capturing audit trails of everything that happens."
The company's competitors include big players like Salesforce.com and Oracle Corp., as well as a dozen smaller players including Hootsuite of Vancouver and Hearsay Social of San Francisco.
Adam Marcus, managing director at OpenView Venture Partners, said Spredfast is well positioned as businesses focus on engaging with their customers.
"Companies are no longer concerned with Likes, but rather with building real customer engagement and value across their social networks," he said in a written statement. "We believe Spredfast has built the only true enterprise-class product to help the Fortune 1000 manage this important channel."
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