With the amount of users on Facebook, Instagram and other social media sites rapidly growing, it’s a minefield for getting your brand image out there. Brands are lining up to spendi big bucks due to the amount of potential exposurethat awaits. Kinetic Socialprovide you a social marketing service tohelp you navigate the playing field.
Recently raising a round of funding of $17.5M, CEO Don Mathis talks about his the company and its future.
Who were your investors and how much did you raise?
Multiplier Capital and Bridge Bank were the financers in this round, contributing $17.5 million in credit and venture debt. As this was a debt raise, Kinetic Social did not designate this round.
Tell us about your product or service.
A leading social marketing platform, Kinetic helps brands deliver quality encounters that delight consumers, build brand value and drive sales. Through our strategic partnership, campaign management and SaaS offerings, we design and manage campaigns across social, display and the mobile open web. Our powerful, intuitive technology reflects how the modern marketer thinks and works. We combine that proactive innovation with strategic thinking at every step. Kinetic is a Facebook Marketing Partner, Twitter Official Partner, Pinterest Ads API Partner and Instagram API partner.
What inspired you to start the company?
The social data signal represents a massive leap forward in terms of the ability to target, optimize and measure advertising in the digital context. It allows genuine people-based digital marketing for the first time in the evolution of the Internet. This more closely matches the way people actually communicate, as opposed to so much mass media throughout history, which has been the equivalent of shouting at potential customers. We built the Kinetic platform to capture and expand upon this opportunity.
How is it different?
Kinetic deploys proprietary psychographic, trend, audience data and targeting in order to improve the effectiveness and efficiency of our clients’ digital marketing. Moreover, we offer a single integrated platform enabling true cross-channel advertising, across all the relevant social media networks and even the open web and mobile. No other peer competitor brings this kind of capability to the table.
We also provide the social context for clients, focusing our services and technology on clients’ campaign objectives through every step of the process, delivering custom reporting that conveys meaningful data analysis and actionable results, and enabling sophisticated measurement and attribution around a client’s core audience, including a proprietary approach to media mix modeling that is relevant across a brand’s entire media spend.
What market are you targeting and how big is it?
Advertisers will spend $23.68 billion worldwide on paid media through social networks in 2015, according toeMarketer.
What’s your business model?
We offer our services via a turn-key SaaS solution or via a managed service basis. In the past year, we’ve expanded our services to include creative optimization and development. Essentially, Kinetic offers comprehensive digital content management capability.
What was the funding process like?
We were able to work with our partners at Multiplier Capital and Bridge Bank to take on financing that will allow the company to expand its services and headcount. While the process was intense, it was also incredibly valuable in giving us real-time market feedback into our current product and where it should go.
Because of the success we’ve achieved this year, we were able to raise this capital on extremely favorable terms and avoid any dilution along the way.
What are the biggest challenges that you faced while raising capital?
We operate in an extremely competitive marketplace, and that always makes for a challenging fundraising effort. Investors want to know how you differentiate the company of course, but also how you will operate and grow in the face of the competition. Our most important task was to highlight how we are positioned in this very competitive landscape, and then point to key metrics supporting that positioning.
Kinetic is entirely focused on being the high-quality, high-end technology and service provider in the social advertising space. We strongly believe that you cannot be both the high-end provider and simultaneously the low cost provider. We’ve chosen the high-end strategy, and we’re grateful that clients appreciate that value, even when we are more expensive than the competition. (This happens most of the time — a lot of our competition is taking an alternative path of trying to grab market share by cutting prices. The problem with this “race to the bottom” thinking is that, eventually, you hit that bottom!)
When we went to market to raise capital, the important thing for us was to show how we’re able to price our high quality approach in our offering, to show how we perform relative to our competition in bake-offs and similar analyses by clients, and to clearly show growth in client spending and client retention at a higher price point. Fortunately, we are able to show substantial results on all of these measures while continuing to grow the company at a rapid rate.
What factors about your business led your investors to write the check?
Kinetic has enjoyed a 100% growth rate over the past year, with a steadily increasing suite of seven-figure customers who continue to renew. Social media marketing continues to grow, and advertisers need an integrated and comprehensive provider to guide them through an ever-evolving landscape that is exploding in terms of both users and the number of relevant platforms. Kinetic has shown that it is highly effective as that platform for our clients, and we’ve found that this holds a strong appeal for investors.
What are the milestones you plan to achieve in the next six months?
We plan to grow our headcount from 80 to 100 to continue updating our platform by improving creative optimization, our data science and management capabilities, and our analytics capabilities. Also, we will continue to expand the number of integrations we have with social media platforms.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Watch your burn rate and get out there fundraising!! In all seriousness, while we have a nice pool of capital reserves today, Kinetic had to live on very little in 2012 and part of 2013. We watched every dollar we spent, and we had multiple scenarios that we paid close attention to in that period, so we could ensure that we did not run out of cash. We also learned to be very creative with financing alternatives, including things like vendor financing and even factoring receivables for a period. Thankfully, those days are behind us, but we did learn a discipline and adopt a cost-conscious structure that remains an important element of our success today.
Where do you see the company going now over the near term?
Kinetic Social has enjoyed 100% growth rate over the past year. We expect to continue that trend as we add more clients, continue to expand our core services, and then look to build upon these to offer ever-more useful capabilities for our clients.
Where is your favorite place to grab a drink in NYC on a nice summer night?
The Rooftop Bar at Pod 39 Hotel. Can’t beat a rooftop bar on a NYC summer night. And hey, it’s close to the office!
Tags: Social marketingsocial marketing datatechnology companytechnology company run through Facebook
