Confirmed: Canadian VC Firm OMERS Ventures Takes $20M Stake In HootSuite At $200M Valuation
AllThingsD has reported, and we have confirmed, that OMERS Ventures, a Canada-based VC, has taken a $20-million investment in HootSuite, the social media management platform, with the company now valued at $200 million.
The investment is a secondary one, and will be coming in the form of purchases of equity from HootSuite’s existing shareholders. These include employees as well as existing investors. That list includes Blumberg Capital, Hearst Ventures, Geoff Entress and Millennium Technology Value Partners, who collectively have invested $4.9 million into the company: $3 million in debt and a $1.9 million capital investment.
HootSuite’s VP of marketing, Ben Watson, tells me that the company currently has 3.5 million registered accounts, up from the 3 million reported earlier this year, when the company said it was operating at an annual run-rate of $11 million in revenues.
The Vancouver-based company is expected to be making a formal announcement at 5 AM PT today. Update: Link to the official press release as posted on HootSuite’s blog is here.
This deal is one of the largest secondary VC investments to take place in the Canadian market in the last 10 years, and follows reports of another big secondary market investment in the social media space, in Foursquare. OMERS Ventures is the VC arm of the Ontario Municipal Employee Retirement System, a large pension fund in Canada.
Reuters is reporting that Blumberg is not among the VCs that have cashed out in the deal. And we have now confirmed with Watson that, in fact, all investors are staying in. “Everyone is maintaining significant ownership,” he said.
HootSuite CEO Ryan Holmes is among those: “Ryan Holmes remains committed to building a billion dollar company, and this new investment partnership marks a new milestone in reaching that goal,” the company said in an emailed statement to TechCrunch.
What the deal signifies is that the company will have a lot more breathing space to continue its product development and growth. Watson told me that although Holmes has ambitions to make HootSuite into a billion-dollar company, “it’s hard to do that when you’re being a lean and mean startup.”
HootSuite currently has 140 employees and expects to bring its headcount up to 240 this year.
The investment is a testament to the ongoing attention in (and increasing value of) companies that are riding the social media wave and creating services to make money out of it.
HootSuite gives users the ability to monitor social media interaction across various networks, such as Facebook, Twitter and LinkedIn. It also provides custom analytics and allows clients of its dashboard to do things like give multiple users the ability to collaborate on updating a company’s social profile, schedule campaigns around messages and so on. It also offers mobile apps.
Customers include PepsiCo, Fox and the NBA among others.
It is also a sign of how the “freemium” model is gaining currency with investors. Watson says the “bulk” of HootSuite’s 3.5 million accounts take the company’s free offering, but there is an increasing number opting for the different tiers of paid service, too. Those include a “pro” option aimed at smaller businesses; an enterprise service for larger numbers of users; HootSuite Univeristy that involves a training/accreditation element; and one aimed at those reselling the product.
- OMERS VENTURES
HootSuite is a social media management system for businesses and organizations to collaboratively execute campaigns across multiple social networks from one secure, web-based dashboard. Launch marketing campaigns, identify and grow audience, and distribute targeted messages using HootSuite’s unique social media dashboard. Streamline team workflow with scheduling and assignment tools and reach audiences with geo-targeting functionality. Invite multiple collaborators to manage social profiles securely, plus provide custom reports using the comprehensive social analytics tools for measurement.
Key social network integrations…
OMERS Ventures is the venture arm of OMERS. OMERS, the Ontario Municipal Employee Retirement System, is one of Canada’s leading pension funds.
OMERS Ventures is interested in investing in early or later stage companies in the Technology, Media, Telecommunications, Clean Tech, or Life Sciences sectors in North America.
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