Hootsuite expanding into customer service, acquires Sparkcentral

Hootsuite

Vancouver-based Hootsuite has acquired Sparkcentral, a Belgium and New York-based startup offering customer service software. The financial terms of the deal were not disclosed.

Sparkcentral’s product is an automated message distribution platform that gives customer service teams the ability to triage and respond to customer inquiries through social media platforms such as Facebook Messenger, Twitter, WhatsApp, WeChat, and SMS.

Sparkcentral’s names among its customers airlines such as Air Canada and JetBlue, as well as companies like Slack, Axa, and Careem, all of which are now a part of Hootsuite’s portfolio.

This expansion represents a new use case for the social media management company.

The acquisition is part of a broader expansion for Hootsuite. Richard Hungerford, vice president of corporate development and strategy, told BetaKit the company is looking to tap into a new product stream: helping customer support teams field and manage inquiries through online messaging platforms.

Hungerford said this expansion represents a new use case for the social media management company, which has historically focused on selling and marketing on platforms such as Facebook and Twitter.

Hungerford said Hootsuite had some functionality in its products for customer service prior to the acquisition, but was still in the early stages of building out that customer care stream.

In a statement sent to BetaKit, Hootsuite CEO Tom Keiser said the company’s expectation was to build its customer care capabilities itself, but noted Sparkcentral’s complementary technology allowed it to accelerate its roadmap.

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In terms of why Hootsuite wanted to expand into customer support, Hungerford claimed the pandemic-fuelled shift to digital-first solutions across a wide swath of industries caused the company to look at expanding into the stream.

“As the pandemic hit and we’ve just seen more and more of this move to online and digital-first, customer care has become a real focal point for our customers,” Hungerford said.

However, this expansion follows several tumultuous years for Hootsuite. In 2018, Hootsuite began exploring selling the company after CB Insights pegged Hootsuite’s valuation at $1 billion USD. In early 2019, the sale was halted after initial offers for the company were lower than expected, according to reports from The Globe and Mail.

Four months after the sale was halted, it was revealed that Hootsuite had laid off 100 employees, or 10 percent of its workforce. Those staffing reductions followed reports the company’s marketing and sales teams failed to meet certain targets.

Hungerford noted that although Hootsuite will continue to build out its selling and marketing streams, this customer care stream will also be a key priority in 2021.

“When we laid out our plans for 2021, looking at what we needed to focus on in order to grow and expand our existing business, social customer care was a big part of that,” added Keiser.

When asked about the current state of Hootsuite as a business, Keiser said the company is “profitable and growing,” with more than 210,000 paying customers globally.

The CEO added that growth will be the main priority for Hootsuite in 2021.

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“I came to Hootsuite to grow the company,” Keiser said. “We will work to better articulate our competitive differentiators and to clarify where we believe social media and the social platforms can best benefit our customers.”

Keiser also spoke to the controversy Hootsuite was embroiled in last year surrounding a customer contract involving US agency ICE. Hootsuite cancelled its contract with ICE, but its status as B Corporation was put under review at the end of last year. This week, it was reported that Hootsuite is retaining its B Corp status.

Describing the incident as “difficult,” Keiser said, “I do feel it has opened us up to more honest dialogue between all of us, as we talk about these things and navigate the uncharted waters of social media, and I do believe it has made us stronger for it.”

Following the acquisition, Hootsuite is focusing on integrating Sparkcentral’s technology with its own product suite.

Thirty members of Sparkcentral’s team will join Hootsuite but will remain in Belgium. Many of those employees will join the company’s product and engineering organization, which Hootsuite is planning to double over the next year.

Isabelle Kirkwood

Isabelle Kirkwood

Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.