When you have clients like Verizon, P&G, Nestle, Kraft, AT&T and Sony… When you’re showing a 300% increase in monthly recurring revenue since 2013… When it’s time to raise your next round so that you can expand into more cities, well, then it’s no wonder that your investors are ready to open the spigots once again.
That’s exactly what happened in the case of Crowdtap, a leading social influence marketing platform that connects brands with consumers, making it easy for them to not only access real-time insights, but also to inspire consumers to share more about the products they love across social media.
The $5 million Series B round came from current investors led by Foundry Group, with participation from Tribeca Venture Partners, Alta Communications and The Mustang Group. We tapped founder and CEO Brandon Evans to tell us more about the funding process this time around, and the company’s plans going forward.
Tell us about your product or service.
Crowdtap is a leading social influence marketing platform that makes it easy for marketers to inspire a crowd of consumers to create quality content, drive unmatched social activity and provide real-time insights. There are many companies that can help brands manage a variety of tactics to drive social influence like influencer networks, samplings, house parties or research. Crowdtap is different in that our SaaS platform centralizes all of these activities, making them measurable, scalable and easy to implement.
What market are you targeting and how big is it?
We work with leading marketers – mostly Fortune 500 companies. Crowdtap’s current customers include Verizon, P&G, Nestle, Kraft, AT&T and Sony.
What’s your business model?
Crowdtap is a SaaS platform; we charge brands a recurring monthly fee for access to the platform.
What was the funding process like?
We had a lot of options. Given our traction, rapid growth and general interest in the social marketing space, we saw a lot of inbound interest. Much of this interest was from leading investors in NY and The Valley. We weighed our business needs for the next 12+ months against sales forecasts. Given the health and profitability of the business, it made the most sense to raise a smaller round with our existing investors versus further diluting the business.
What are the biggest challenges that you faced while raising capital?
For us, it was a smooth process; it was more a matter of being disciplined and thoroughly evaluating the needs of the business.
What factors about your business led your investors to write the check?
We are very fortunate to have had tremendous revenue growth over the last couple of years including a 300% increase in monthly recurring revenue in 2013. At this point, we have attracted the attention of many later-stage investors, especially when looking at our Fortune 500 client roster.
What are the milestones you plan to achieve in the next six months?
The latest funding round coincides with the opening of new Crowdtap offices in LA and Chicago to support regional business development. We recently launched new products that have performed very well in beta. We will continue to invest in these advancements as we integrate them into our core platform. We also plan to invest in marketing and research to ensure brand marketers are well informed and can easily make decisions regarding social marketing investments.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
I’d say to raise based on needs, but certainly before you need it. Take a hard look at the next couple of years. What money will truly be needed to achieve the business’s aggressive goals? Be sure to start fundraising with lots of runway to ensure you sit confidently and comfortably in the decision-maker position.
Where do you see the company going now over the near term?
Over the past two years, the company has experienced explosive growth. Crowdtap SaaS licenses for Fortune 500 brands more than doubled since February 2013. Monthly recurring revenue grew over 300% in 2013, and the company doubled its US headcount.
We believe that interest in our Social Influence platform will continue to grow. As new research reveals, Millennials (soon to have the largest combined purchasing power) now spend 30% of their time with content that is created by their peers (UGC). Our platforms is a much needed solution, making it easy for brands to inspire crowds of consumers and influencers to create UGC and drive the social conversations happening around their brands.
We have already started 2014 on track with our aggressive goals and only see this growth increasing as marketers continue to embrace the importance and necessity of Social Influence.
