Social Customer Service Firm Sparkcentral Locks Up A $12M Series B

Next Story

The Net Neutrality Debate Also Affects SMS

Sparkcentral, a company that provides tools to help businesses conduct customer support over social channels, has raised a $12 million Series B round of funding, led by Split Rock Partners.

The company previously raised a total of $5.6 million, including a $4.5 million Series A round of capital in October of 2013, or around 15 months ago. That places the company’s Series B round inside of a normal raising schedule.

I asked Sparkcentral why it decided to raise $12 million for its Series B — in the current capital climate, the sum is slightly modest, even if standard by historical norms. The company’s CEO Davy Kestens indicated that the sum “fit [the company’s] growth curve,” and was predicated on how much money Sparkcentral would need to expand both its staff, and feature set.

Like quite literally every company in technology that isn’t entering some sort of deathspiral, Sparkcentral is hiring. The firm, which splits its operation between the United States and Belgium, expects to double its current 30 person employee base in 2015.

So, what is Sparkcentral? I spoke to its co-founder Matt Finneran, who indicated that the company was once a social media company focusing on customer service, but now thinks of itself as a customer service firm that focuses on social media. In the view of Finneran, Sparkcentral is different from other players in the social media management space because it does not have a marketing focus, like the Chicago-based Sprout Social.

I asked the company to detail is recent financial performance, and it responded with comparative, and not absolute data. That weakens the dataset. Still, according to Sparkcentral, its revenue grew 320 percent in 2014, when compared to the year prior. During that same period, its customer based expanded 100 percent. Those two figures imply that the company is landing increasingly large clients, that it is seeing increasing contract value among current customers, or some combination of the two.

Continuing the financial theme, I asked the company how it weighed a balance between growth, and spend — Box famously invested heavily in future revenues, only to see its short-term losses spook the public markets. Kestens indicated that it is important to have a “roadmap for growth,” but that it is also critical to not “drive off a cliff” at full clip.

Sparkcentral is different from other SaaS companies in that, given that some of its clients are large firms like Delta, its ratio of monthly recurring revenue to annual recurring revenue (MRR v. ARR) is likely outside of the norms — I presume that Delta isn’t paying for much software on a monthly basis, in other words. Kestens said that his firm is, given that, unsurprisingly more focused on quarterly data when it comes to tracking its own performance.

SparkCentral has grown quickly inside of an expanding, if crowded technology market category. It has the capital to pull off its plans, so now the question is execution. I’ll check in with the firm in a few quarters, and see if I can scare up some new revenue numbers.

IMAGE BY FLICKR USER DANIEL DIONNE. UNDER CC BY 2.0 LICENSE (IMAGE HAS BEEN CROPPED)