HootSuite Continues To Grow After Turning Down Multiple Offers
HootSuite is a social media management company that launched three years ago. Since then they have grew to almost 4 million users with $75 million in revenue. HootSuite’s founder Ryan Holmes said that he and several shareholders have sold $20 million worth of shares to OMERS Ventures, which is an investment arm of one of Canada’s largest pension plans. This is one of the biggest venture capital deals in Canada.
HootSuite is cash-flow positive and they previously raised $4.95 million from Blumberg Capital, Hearst, Millenium Technology Ventures, and angel investor Geoff Entress. Holmes and 25 employees that have been at HootSuite for more than a year are eligible to participate in this deal. Holmes said that this deal is “because I have a vision to build a billion-dollar company…and now I’m a bit de-risked.”
Holmes said that too often in Canada, entrepreneurs are willing to sell their companies at $50-$100 million. He said this is a life-changing amount of money, but it’s a shame because so many companies have huge potential. HootSuite was given offers for $10 million, $40 million, and $100 million, but turned all of these deals away. Now Holmes has a “nest-egg” in terms of what he is doing.
HootSuite allows organizations to launch marketing campaigns on Facebook, TWitter, and LinkedIn. HootSuite now has 140 employees and expects to have 240 by the end of the year. Millenium Partner Alex Ferrara and Blumberg Capital Managing Partner David Blumberg, who are on HootSuite’s board, support Holmes’ strategy and did not sell shares.
One of the primary reasons for HootSuite’s growth is because of their freemium model. Anyone can sign up, but there is a price for premium features.