In this day and age, companies live and die by social media and a good team can do wonders for your business. But who is spearheading your social strategy across all channels? If this is an issue for you, Tracx is the solution. It’s a SaaS-based social media management platform that monitors and aggregates all your social data into a single, easy-to-use interface so that you can make data-driven decisions without having to spend countless hours trying to accumulate all data. The company is working with an impressive array of brands like EA Games, Kraft, and Sears.
AlleyWatch chatted with CMO Jenifer Kern about the company, its recent round of funding, and how it plans to separate itself from the pack.
Who were your investors and how much did you raise?
Our investors were Camden Partners (Baltimore), Edison Partners (New Jersey/NY), and our CEO Rick Rudman. We raised $12.5 million, Series D.
Tell us about your product or service.
Tracx is a SaaS social media management software solution that monitors over a billion social interactions daily and surfaces the data in the form of insightful charts and analyses for businesses to make informed decisions about their product, service, and social media strategy. We have an open API enabling us to integrate with many internal systems and applications to provide one voice of the customer and a single platform for social insights.
What inspired you to start the company?
The software was developed in Tel Aviv in 2009 by a group of passionate technologists who saw an opportunity to analyze the large volume of social media conversations to help companies make better business decisions.
How is it different?
In the crowded space of Social Media Management, Tracx stands out because it was built first and foremost as a big data aggregator and analyzer – pulling the most social data from the largest group of social networks, owned media sites, blogs, forums, news sites and review sites (over 100 Million sites). With the most pieces of data from the broadest networks, Tracx ensures customers don’t miss important individual social posts while also assembling the complete puzzle of social interactions to uncover trends, influencers, and better audience demographics, with the full picture perspective.
What market you are targeting and how big is it?
Social media spend is expected to grow from $9B in 2015 to $23B in 2020, with a 21% CAGR. Social is the fastest growing segment of digital marketing.
What’s your business model?
On the customer side, our business model is to bend over backwards to serve our customers and help them grow their businesses through targeted social media intel. We want our customers to take advantage of all that social media offers to improve brand reputation, instant communications, sales, and product research. On the sales and marketing side, our business model is simple – to generate demand through brand awareness, inbound demo requests, and content marketing – then convert and close a percentage of that business.
What is the biggest social media mistake most companies commit?
Most companies strive to simply increase followers, fans, views, clicks on social media – but overlook the potential of improved one-to-one engagement with end users, influencers, and target audiences speaking about their brand or related topics. Instead of starting with the conversation in play, companies try to put new conversations in play on social, but miss the larger context of what really matters to their audience. With Tracx, users are encouraged to first uncover what people are saying, then build their social strategy from there.
What was the funding process like?
Tracx CEO Rick Rudman is a veteran SaaS CEO with experience running both private and public companies and raising investment capital to support growth along the way. Given this background, the funding process was somewhat informal, leveraging investors that believed in our CEO’s track record and the potential for Tracx.
What are the biggest challenges that you faced while raising capital?
There has been a shift over the last five years that has seen investment firms look to put larger amounts of money to work. Tracx is taking a balanced approach to growth and profitability with the goal of growing topline 35% plus per year while getting to cash flow break even by the end of 2018. Since we were only raising a total of $12.5M, which also included existing investors, we had to eliminate firms that would only write a larger check.
What factors about your business led your investors to write the check?
Our investors were extremely impressed with our leadership team’s capabilities and talent, as well as the strength of our platform and market opportunity. The employee and previous investor relationships were key to instilling new investor confidence.
What are the milestones you plan to achieve in the next six months?
Over the next 18 months we’re looking to work towards becoming cash flow positive. In the immediate next 6 months we’ll be building our inbound marketing engine and refining our sales/marketing strategy for maximum market impacts and demand generation.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
At the end of the day all investors really want is to make money. Along the way they look for great products and great markets with a passionate executive team they can believe in. The “growth at any cost” cycle of a few years ago has moved back to a balanced growth and profitability model that shows the ability to grow, but with fundamentally sound metrics that prove out a long-term model profitability model. For start-ups without a lot of capital cash is still King. If you are cash flow neutral your company can go for a long time and you will always be in control. When you are out of cash your choices become very limited.
Where do you see the company going now over the near term?
The social media market looms large with billions being spent every year. Yet companies are still figuring out the best way to harness the power of social to help meet their business goals. We see this more as a marathon than a sprint. Our plan is to balance high topline growth of 35% plus with increasing cash flow leverage as we build a highly repeatable and sustainable business and move towards market leadership.
Where is your favorite fall destination in the city?
The parks! Bryant Park, Washington Square Park, Highline and of course Central Park.