Social media marketing start-up Stackla banks $4 million

Stackla co-founder Damien Mahoney says the business is looking to strike more partnerships after raising funds from Bailador.

Social media marketing start-up Stackla has closed its second capital raise in 2016, this time banking $4 million, from an existing investor.

In February the business, which lets big brands harness word-of-mouth advertising by putting customer-generated social media content at the heart of their marketing, received a $6.1 million capital injection in February from Bailador.

Stackla co-founder Damian Mahoney said the new funds would let the business invest in its development team and take on new partnerships with firms in the content management space.

“The reason the opportunity has opened up is because we’ve seen some consolidation in our vertical in 2016, with four different transactions taking place with our competitors,” he said.

“Consequently our technology has become more sought after.”

In May, Adobe acquired Stackla competitor Livefyre for an undisclosed sum, having previously participated in the start-up’s $US47 million Series D round, alongside Salesforce Ventures.

Monotype also acquired Olapic for $US130 million in July.

Turning down buyout bids

Mr Mahoney said he had also received offers to buy Stackla in the first half of the year, but had turned them down.

“We’re confident in our own abilities to forge a path independently,” he said. “It wasn’t the right time for us or a path that we’d pre-meditated.”

The business was founded in 2012 by Mr Mahoney, who previously started digital sports agency Pillar Digital, his colleague Peter Cassidy and former NBN Co senior system architect Semin Nurkic joined the pair a short time later as chief technology officer.

Stackla considers genuine social media posts as the only way to cut through the masses of advertising in today’s digital world, particularly with the proliferation of ad-blocking technology.

“At a high level 90 per cent of customers will seek out some sort of validation from their peers, often via a social channel, before making a purchase,” Mr Mahoney said.

“That’s a strong indication of the value of our technology. When you look at the advertising campaigns we’ve been a part of, they’ve ranged from 25-100 per cent higher response rates than sponsored content.”

Doing business with big brands

Stackla counts big name brands such as Ford, McDonalds, Jimmy Choo and BMW among its clients. It has a software-as-a-service model, so these customers pay an annual licence fee.

The business is now headquartered in the US, but also has offices in the Australia and Europe.

“We have a reasonable customer base from Singapore… and that’s being serviced from Sydney. So we’re seeing opportunities in that part of Asia,” Mr Mahoney said.

“We also see opportunities in mainland Europe. We don’t have immediate plans to expand there, but we think the partnerships we’re getting involved in will expose us more deeply to those markets.”

Stackla already has a deal with Swedish digital content management business Sitecore.

[Source:-Financial Review]