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Digital marketing firm HubSpot raises $35 million in latest funding round

Brian Halligan, HubSpot CEO
Brian Halligan, HubSpot CEOCredit:  

The Cambridge marketing firm HubSpot, which helps small and mid-size businesses reach prospective customers using social media, is announcing Monday that it has raised an additional $35 million.

The investors include Altimeter Capital, Cross Creek Capital, and, according to two people with knowledge of the deal, the Boston mutual fund giant Fidelity Investments. The new commitments will bring HubSpot’s total fund-raising to about $100 million since it was founded in 2006 by two alumni of the Massachusetts Institute of Technology’s Sloan School of Management.

Chief executive Brian Halligan said HubSpot will be adding employees in Cambridge, where it already has 400 people, and will open a new office in Dublin in January and hire about 50 people there in 2013.

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The new funds will also help with HubSpot’s other growth plans: acquiring small marketing companies. HubSpot previously bought two Cambridge start-ups, Performable and Oneforty, primarily for their engineering talent.

Those acquisitions, Halligan said, “really worked out great. We retained the key people on those teams, and they were people it’d be really difficult to hire on the open market.”

HubSpot makes software used by small and medium-size businesses to manage online marketing and social media on sites such as Facebook and Twitter and on popular blogs. The company has dubbed its approach “inbound marketing,” because it attracts customers who are already searching for a given company’s products or services.

In August, it released a new version of its marketing platform, HubSpot 3, which lets companies deliver more personalized messages to current and prospective customers and is intended to appeal to larger clients with longer, more complex sales cycles.

The company makes money from annual software subscriptions priced at $2,400 and up and says it has 8,000 customers in 56 countries. Halligan said revenue is running at an annualized rate of $60 million; in 2011 it reported revenue of $29 million.

HubSpot is also adding board members and executives with public company experience, including chief operating officer J.D. Sherman, who for six years was chief financial officer of Akamai Technologies in Cambridge.

HubSpot and Halligan declined to identify Fidelity as a new investor, and Fidelity declined to comment. But two sources with knowledge of the investment said Fidelity is one of the funders. The Boston financial giant has previously invested in promising private companies before they went public, most notably Facebook and Google.

Halligan said HubSpot has at least $8 million from its last fund-raising round, in March 2011, but decided to target another large round of funding because “we want to press on the gas a little harder and grow a little faster.”

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