Social media management tool Hootsuite just closed an enormous second round of financing. The $165 million investment was led by Insight Venture Partners, the New York-based venture firm that pumped cash into Tumblr and holds a substantial stake in Twitter.
Hootsuite CEO Ryan Holmes told that he expects to make a number of strategic acquisitions in the near future, that it’s on the hunt for startups in the social ads and analytics space. Expect the company to hire like mad — Holmes added that he is looking for the “best and brightest” to augment the team.
“We absolutely can put the funds to work,” he told. “Our goal is to build a multibillion company [and] we’re putting the money toward marketing and international expansion.”
Vancouver-based Hootsuite claims to have 7 million customers (paid and nonpaid); the majority are small to medium-sized businesses. With its dashboard, the company is solving an issue for many individuals and companies who manage Twitter, Facebook, and other social media accounts. With Hootsuite, employees can keep a close eye on social activity as well as schedule and manage posts.
Holmes said the company experienced a whopping 300 percent growth last year.
Hootsuite operates with a “freemium” model, although it offers an enterprise version of the product with enhanced features. Giants like Pepsi and Sony Music pay anywhere from $10 to $1,000 per month to use the service. Only about 3.5 percent of customers pay for the premium offering.
The funding contains a secondary component of an unspecified amount. This money will likely provide the founders with some liquidity, which is increasingly common in venture deals of this scale.
Facebook investor Accel Partners and existing equity holder OMERS Ventures also participated in the round. Jeff Leiberman of Insight Venture Partners, Ryan Sweeney of Accel, and John Ruffolo of OMERS joined Hootsuite’s board of directors.
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