Digital marketing firm HubSpot adds $35 million in funding, some of it from Fidelity Investments, to fuel growth
CEO and co-founder Brian Halligan says the company has 400 employees at its Cambridge headquarters, and will open its first international office, in Dublin, Ireland, in January. HubSpot plans to hire about 50 people there in 2013. The company says that 8,000 customers in 56 countries use its software to produce informational content on blogs, Facebook, and Twitter -- an approach HubSpot has dubbed "inbound marketing," because it attracts customers who are already searching for a given company's product or service.
Halligan says that HubSpot still had "$8 or $9 million in the bank" from its last fundraising round, in March 2011, but that "we want to press on the gas a litte harder and grow a little faster." That means adding employees in Cambridge and Ireland, and also looking for smaller marketing companies to acquire. Halligan says that the acquisition of two Cambridge startups, Performable and Oneforty, primarily for their engineering talent, "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."
In August, HubSpot released the latest version of its software, HubSpot 3, which enables companies to deliver more personalized messages to current and prospective customers.
Halligan says the company is generating revenue at an annualized run rate of $60 million, and that it has been adding board members and executives with public company experience, including chief operating officer J.D. Sherman, who had spent six years as chief financial officer of Cambridge-based Akamai Technologies.
Among the investors in HubSpot's latest round are Altimeter Capital, Cross Creek Capital, and Fidelity Investments. While Halligan said he wasn't allowed to discuss Fidelity specifically -- and the firm was not mentioned in today's press release -- he did say that "once in a while, this firm does invest in pre-public companies like Facebook and Workday," which sells human resources software. That describes Fidelity, and two sources close to the company confirmed that Fidelity is the unnamed investor. Fidelity spokesperson Sophie Launay said she couldn't comment on the HubSpot investment, but that Fidelity's mutual funds may invest a small percentage of their assets in private companies.
At a HubSpot board of directors meeting held on Halloween last week, general counsel John Kelleher dressed as "the HubSpot IPO," plastered with SEC documents and dollar bills. For the time being, that's wishful thinking... and Kelleher's prior employer, the software maker Endeca Technologies, had hoped to go public before eventually being picked up by Oracle.
The picture below, from last week's board meeting, was posted to Facebook:
From left: David Skok of Matrix Partners as Dracula, Larry Bohn of General Catalyst as a monkey, HubSpot CTO Dharmesh Shah as Barack Obama, HubSpot CEO Brian Halligan as Mitt Romney, HubSpot COO J.D. Sherman as a cowboy, LogMeIn CEO Michael Simon with fangs, John Kelleher as the HubSpot IPO, and Ron Gill of NetSuite as, well, HubSpot's audit committee chairman, I guess.
About Scott Kirsner
Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.
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