Today, leading social media dashboard creator Hootsuite announced a $165 million Series B financing, led by Insight Venture Partners with participation from Accel Partners and existing investor, OMERS Ventures.
With the new round of funding, early-stage venture capital firm Blumberg Capital, seed investor and largest institutional shareholder in HootSuite reaped a 52x return in just four years. Blumberg Capital and Hearst Ventures led the original seed round financing of HootSuite in December 2009 and a subsequent financing in 2011. Blumberg Capital has been the largest institutional shareholder in HootSuite until today’s Series B funding.
“Our focus during the last couple years on just building this business on social media", said Ryan Holmes, CEO of Hootsuite. “We’ve effectively gotten to where we have in just under $5 million in the company, and we’ve kept focus on serving the needs of customers. The money will go toward international expansion, including hiring in Latin America and Europe."
“I congratulate Blumberg Capital on their success with HootSuite, which demonstrates what many of us have known for years - that Blumberg is often the first institutional investor to identify and fund savvy entrepreneurs with truly innovative ideas,” said Dennis Phelps, General Partner with Institutional Venture Partners (IVP). “I'm familiar with many of the other companies in Blumberg's portfolio, and HootSuite is just one of several that could generate very large returns for the firm."
Hootsuite in its fourth year of operations,has just surpassed 7 million users worldwide and is used by people in more than 156 countries.
Speaking with YourStory, David J. Blumberg, Managing Partner of San Francisco-based Blumberg Capital shared, “This is a significant milestone and a triple win. First, our investors will receive over 52 times their investment. Second, this massive return validates our strategy of “Leading the Seed” financing in early-stage, highly promising, and innovative software companies. Third, we welcome our new co-investors as the Company grows to even greater levels of success in improving the efficiency and effectiveness of Social Media for enterprises and consumers.”
Leonard Lodish, Professor of Marketing at the Wharton School of Business shared - ”This transaction validates a third and increasingly popular path to liquidity for early-stage investors. Until recently, early-stage investors could only target two positive exit scenarios: an IPO or a sale to an acquiring company. Today, later-stage investors are eager to buy into fast growing companies such as HootSuite.”
Hootsuite in their recent blog post shared that they have experienced 300% growth in revenue over the last year and with the new round of funding and international expansion plan - it'll be interesting to see how the the company grows from here on.