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IPO Candidate HubSpot Expands Beyond Marketing With New Products

Posted by Roman Bodnarchuk on Mon, Aug 26, 2013 @ 08:08 AM

By Tomio Geron, Forbes Staff.

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In both the consumer and business buying context, people are no longer responding to sales tactics like banner ads, cold calls and emails. Instead, people are searching for information on purchases on Google or blogs, or going to a company’s website. That “in-bound marketing” is where HubSpot comes in, aiming to serve up the best content and tools to draw in buyers once they hit Google or a company’s website.

The quickly growing company, which has 10,000 customers and raised about $100 million from General Catalyst Partners, Matrix Partners, Scale Ventures Partners, Sequoia Capital, Salesforce.com and Google Ventures, is launching two new products to expand further beyond marketing.

The first, called Signals, is a marketing tool for sales people. The plug-in for the Google Chrome web browser gives sales reps more context on their customers. The free version of the app constantly monitors data on customers and pops up alerts when customers open emails they’ve sent from Outlook or Gmail. It also sends notifications about targeted 

describe the image“It actively watches all the people you designate as important. It pulls needles out of that haystack,” Halligan says. “So they can have much better conversations with prospects.”clients when their LinkedIn profile or Salesforce.com status changes or, in the paid version, even when they’re viewing the sales rep’s website. It also explains what parts of the site they clicked on. Knowing if someone visited your pricing page can be an important signal, HubSpot CEO Brian Halligan says.

The second product, a Content Optimization System, is a new content management system. Like marketing automation systems that personalize emails in massive email lists, the COS aims to do the same for websites. Using cookies, it delivers targeted personalized messages on websites and landing pages. It also emphasizes mobile to provide better context and a better mobile experience.

HubSpot wants to provide a broad suite of tools to manage a variety of marketing and related areas for a company. While there are tools for SEO, social media, content management or web analytics, HubSpot aims to provide one integrated app for all those areas.

“We may not have all the features those folks have,” says CTO and cofounder Dharmesh Shah. “But we have the value of all-in-one integration of all those applications. Because we have that all in one system, it’s a very personalized and customized, including email marketing automation, segmentation and customization of your website and social media–all in one.”

HubSpot has stayed focused on small and medium-sized businesses who don’t want to have 5 or 6 different products. “We’re a little more like Apple than Microsoft,” Halligan says.

This sector has been hot with HubSpot competitors Marketo and Eloqua having gone public last year (Eloqua was then acquired by Oracle for $871 million. But those companies haven’t focused on small businesses, says Pat Grady, partner at Sequoia Capital and investor in HubSpot.

“The Eloquas and Marketos very quickly succumb to the big dollars for big enterprises,” Grady says. “Brian and Dharmesh focused on making the product simple and easy enough to use that a one-man marketing team can pick it up and get value. Staying focused on that SMB customer roots them in a part of the market that bigger companies can’t get to.”

HubSpot, which generated revenue of $52.5 million last year and now has 600 employees, will stay independent, Halligan says. It is also focusing on international growth, where it expects to generate 20% of its revenue in the third quarter of this year. “We’re going to stay independent. There’s been a lot of consolidation in the industry. But we want to build a company our grandkids can be proud of. We’re not there yet but we’re on the way.”

As for an anticipated HubSpot IPO, Halligan says there are no immediate plans, but it looks like to happen eventually. “At some point, we’ll change the type of investors from private to public, but we’re in no hurry to do so. We’re trying and we’re on our way to building a sustainable lasting business.”

 

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Topics: inbound marketing, linkedin, Hubspot, signals

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