Hoot, hoot: Social media tool HootSuite eyes growth
Source: Peter Moreira, Special for USA TODAY 11:17 p.m. EST November 28, 2013
With a landmark funding deal in place, social media management company HootSuite faces the mammoth task of maintaining its stellar growth in a maturing market that is attracting formidable competitors.
Vancouver, Canada-based HootSuite — which turns 5 on Thursday — is a market leader among companies providing tools that monitor and manage social network posts. HootSuite is used by more than 8 million customers in more than 175 countries — from individuals to 744 of the Fortune 1000. Its enterprise clients include the likes of Pepsico, HBO, Virgin and CBS Interactive.
The stellar growth attracted $165 million in venture capital financing in August — one of the largest VC deals of the year and the largest VC funding ever for a Canadian software company.
Now comes the hard part: HootSuite must continue to increase market penetration and revenues around the world. It has to introduce new products in an evolving social media market. And it has to do all this while combating a growing number of competitors. Analysts and investors say the company should overcome these obstacles given its track record.
“HootSuite has proven itself to be really nimble and when the market has changed it’s adapted,” says independent technology analyst Carmi Levy.
The HootSuite dashboard is an easy-to-use tool that allows users to execute, coordinate and monitor social marketing campaigns across a range of platforms, including Twitter, Facebook, Google+ and others. People can use it to launch campaigns, program posts for certain times and channels, and monitor the response among users.
In October, the company said third-quarter revenue was 150% above the same period a year earlier. The privately held company does not disclose specific financial details.
Having tripled its workforce to 300 in 2012, it has increased staffing this year to 400 employees and is still hiring. Founder and CEO Ryan Holmes said the company is now focusing on geographic expansion beyond its core markets of the U.S. and Canada. It is especially eager to grow its London office and its business in the Asia-Pacific region.
And HootSuite has to continue to add new features.
“We have a huge focus on products and engineering,” Holmes said in an interview. “We have a lot of things that we want to do with product. It’s never a complete thing in my opinion.”
The company launched its HootSuite App Directory two years ago and users have installed more than 1 million apps to enhance the range of tasks that can be performed with HootSuite. It recently added new apps, including features for Gmail, YouTube Analytics, SoundCloud, and ViralTag for Pinterest. The directory now features more than 70 extensions and applications.
Given the amount of money the company has raised, Holmes also said HootSuite is now in the market for acquisitions that could build up its product offerings. The market for social media analysis continues to grow — Holmes says it’s a potential $20 billion sector — and HootSuite faces competition from such dashboards as Twitter’s TweetDeck, Salesforce’s social media marketing suite and Chicago-based start-up SproutSocial.
Investors say the winners in the field will be highly valuable companies.
“HootSuite is the market leader in social media management,” said Sid Paquette, director of OMERS Ventures of Toronto, which invested in the latest funding round along with Insight Venture Partners of New York and Accel Partners of Palo Alto, Calif. “With clear vision and strong leadership, HootSuite was able to identify and create a solution for a clear market need. Their success is demonstrated by their millions of users around the world.”
Holmes is determined to build on that success, and to maintain the culture he has developed in the company. He emphasized that he loves his company’s can-do spirit and its ability to overcome obstacles.
“I hope in some ways (the recent funding) changes us in a big way, and in other ways I hope it changes us not at all,” said Holmes. “We think there’s a huge opportunity here and we’re interesting in continuing to build out.”
Peter Moreira is a Halifax, Nova Scotia-based journalist who writes about technology and start-ups in Canada.