Social Media Management Startup Files to Go Public

By StartUp City | Monday, November 04, 2019

Sprout Social focuses on organizations’ focus on social media and social media’s reach to build a platform to manage it all. The company software combines data, workflows and social messaging so that users can manage their social media all from one place. Currently, the company has over 23,000 customers, spread across 100 countries.

FREMONT, CA: Chicago-based social media management company Sprout Social has filed to go public with an average recurring revenue of over USD 100 million. Founded in 2010, Sprout Social was launched publicly in 2011 and has raised USD 111.5 million in outside funding since. Its last external funding was in December 2018 when it closed its Round D funding led by Australian sovereign wealth Future Fund and saw participation from New Enterprise Associates and Goldman Sachs.

Sprout Social focuses on organizations’ focus on social media and social media’s reach to build a platform to manage it all. The company software combines data, workflows and social messaging so that users can manage their social media all from one place. Currently, the company has over 23,000 customers, spread across 100 countries.

In 2018, 99 per cent of Sprout's revenue was sourced from software subscriptions. The same percentage of income was sourced software subscriptions for the first nine months of 2019. At present, the company estimates that the market opportunity of their product in the market is USD 13 billion in the United States. The company also boasts a 30 per cent revenue from customers who are located in other countries in 2018 alone, giving them an advantage over their competitors on the international market front.

Sprout Social's IPO comes during a somewhat quiet period for technology offerings, despite such debuts having a strong start to the year in terms of offering volume and dollars raised. The company is also pursuing an IPO immediately after WeWork pulled its IPO and had to secure emergency financing to avoid running out of cash. The results of these events will, therefore, have more weight than its flotation might have carried had it come in June. The company follows a dual-class share structure which grants holders of Class B founder shares ten times the voting power as holders of Class A shares, which is primarily assigned to investors. Co-founders Justyn Howard and Aaron Rankin own 37.4 percent and 41.5 percent of Class B shares, respectively.

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