Extole Secures $10 Million For Social Referral Funding
Strangers or friends can become the most successful brand advocates through online word-of-mouth marketing. Shasta Ventures thinks so highly of the idea that the venture capital firm -- along with existing investors Norwest Venture Partners, Redpoint Ventures, and Trident Capital -- sank $10 million in Series C funding into San Francisco-based Extole, a consumer-to-consumer social-marketing platform.
Jim Barnett funded a seed round in the company in 2009, joined as chairman of the board, and then became a partner at Shasta Ventures in November. Extole marks the first Shasta investment for Barnett. "A bunch of companies help brands build advocates through technology, but Extole builds it through consumer referrals," he said.
Extole's technology helps to identify social advocates -- for example, women ages 18 to 34 in urban areas. Companies determine the value of the customer and the types of message they will respond to more often through analytics.
Extole's 70-person team grew revenue 400% in 2011, while supporting more than 200 customers, brands such as Kate Spade and AAA, as well as agencies, across retail, eCommerce, and media. The funding round will assist build out the company's product development, customer acquisition and team.
Folica, an online retailer of hair care and hair styling tools, launched a social referral program offering $10 to the referrer and $10 to the friend. Customers were incentivized to share content via Facebook, Twitter, email and URLs. The promotion identified more than 6,000 brand advocates, each averaging 4 shares per advocate. It generated more than 21,000 social shares via Facebook, Twitter and Email, and drove a 93% email open rate and a 16% conversion rate.