Business Blog: Marketing, AI, and $100 million in ARR

Exclusive: SOCi crosses $100 million in ARR

August 1, 2024

Whenever I run into something that's oddly hard to define, I usually take a beat. And something about marketing tech, or martech, has always felt abstract to me—if martech is all the tech tools that marketers need, then don't thousands of things (whether built for marketing or not) fit into that category?

So, I was curious about marketing automation company Soci, stylized as SOCi and pronounced “soh-shee.” The startup’s been around for more than a decade and it provides a platform for multi-location companies like Dick's Sporting Goods and Ace Hardware to manage their social media, search, reviews, and other digital marketing channels.

In 2023, Soci raised a $120 million round, led by JMI Equity, of both debt and equity to fuel its expansion. Those expansion plans are yielding results: Soci has surpassed $100 million in annual recurring revenue, Fortune can exclusively report. Soci’s other investors include Vertical Venture Partners and Blossom Street Ventures, and the company has raised $240 million to date.

Soci hasn’t been an overnight growth story. The company was founded in 2012, amid a 2010’s boom in which investors were extensively backing martech names like Sprinklr and Marketo. (Sprinklr went public in a 2021 IPO that missed the mark, and Marketo was acquired in 2018 by Adobe for $4.75 billion.) Today, amid the AI boom, martech seems equally set up to either benefit enormously in this new wave—or get dusted. Soci says its AI products, like social media-focused Genius Social, are helping the company barrel forward.

“AI is coming,” said Afif Khoury, Soci CEO and cofounder. “It's going to make things worse, and it's going to make things better. What's really cool is that we've held on long enough now to see yet another crazy inflection point in marketing. We had the mobile revolution. Now, we have the AI revolution. It's going to make us want information faster—and be a little more frustrated when we can’t get what we want.”

Soci currently has about 1,000 customers and manages three million locations for companies like Domino’s and Dick's. Khoury says that there are all sorts of industries the company hasn't yet tapped into.

“We have the rest of the world to go sell to," he told Term Sheet. "We have verticals we've just started to enter and we're going deeper into, like financial services, insurance, and healthcare…So, from a TAM perspective, it's massive."

Khoury wasn’t especially keen on pinning an exact number on the total addressable market, and neither did JMI Equity general partner Suken Vakil, who says it’s a “multibillion-dollar TAM.” But what Vakil did help me understand is this: The opportunity for Soci, or any growing martech startup, is that the sector is fragmented, much like marketing functions themselves are fragmented.

“There are few companies that can provide a single integrated solution that spans multiple martech categories, serving both local and national marketing needs, and integrate AI in a way that automates essential business processes and workflows,” Vakil said via email.

And that's seemingly Soci's opportunity today and tomorrow—to simplify something that, though definable, is diffuse.

Elsewhere…The Fed yesterday held rates at their current 20-year high, but the rumblings of a possible rate cut are growing louder. Eyes on September, folks. For my fellow recreational Fed watchers: What do you think this means for deals and exits? Send me your thoughts!

On Amazon…My colleague Jason Del Rey just published a feature on how Amazon's famed management rules and practices (remember the two-pizza rule?) are faring under Andy Jassy's tenure. It's a fascinating piece about how the intellectual lineage of a company dilutes and evolves over time. Read the whole story here.

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.

Nina Ajemian curated the deals section of today's newsletter.

VENTURE DEALS

- Spring Health, a New York City-based mental health provider, raised $100 million in Series E funding. Generation Investment Management led the round and was joined by existing investors Kinnevik, the William K. Warren Foundation, RRE, and Northzone.

- Type One Energy, an Oak Ridge, Tenn.-based developer of fusion technology designed to produce power with zero emissions, raised $53.5 million in a seed extension. Breakthrough Energy Ventures led the round and was joined by Foxglove Ventures and GD1.

- Ema, a San Francisco-based developer of an AI employee designed to boost productivity across all roles in an organization, raised $36 million in additional Series A funding. Accel and Section 32 led the round and were joined by Prosus Ventures, Sozo Ventures, Hitachi Ventures, Wipro Ventures, and others.

- Graphyte, a Dover, Del.-based developer of a carbon dioxide removal system, raised $30 million in Series A funding. Prelude Ventures and Carbon Direct Capital led the round and was joined by existing investors Breakthrough Energy Ventures and Overture.

- Perceptive, a Boston, Mass.-based dental robotics company, raised $30 million in seed and Series A funding. PDS Health, Dr. Ed Zuckerberg, Innospark Ventures, and others led the round.

- Applied Carbon, a Houston, Tex.-based designer of carbon-removal technology, raised $21.5 million in Series A funding. TO VC led the round and was joined by Congruent Ventures, Grantham Foundation, Microsoft Climate Innovation Fund, and others.

- Checkly, a Berlin, Germany-based synthetic monitoring company, raised $20 million in Series B funding. Balderton Capital led the round and was joined by existing investors Accel, CRV, and Paul H. Müller.

- Tezi, a Menlo Park, Calif.-based developer of an AI recruiter, raised $9 million in seed funding. 8VC and Audacious Ventures led the round and were joined by Liquid 2, Afore, Prime Set, South Park Commons, and angel investors.

- Bee, a San Francisco-based developer of a wearable AI assistant, raised $7 million in seed funding. Exor led the round and was joined by Greycroft, New Wave VC, Banana Capital, and Brian Bedol.

- Bourgeois Boheme, a Vilnius, Lithuania-based cash flow management platform, raised €6.5 million ($7 million) in seed funding led by Graphit Lifestyle.

- Icebreaker, a New York City-based professional networking platform, raised $5 million in seed funding. CoinFund led the round and was joined by Accomplice, Anagram, Legion Capital, and angel investors.

- Raad Labs, a New York City-based startup using blockchain technology to establish a network of weather sensors, raised $2.3 million in funding. CoinFund led the round and was joined by Tribe, EV3, and Protagonist.

- Orchid, a Wilmington, Del.-based AI-powered clinical notes platform designed for mental health cases, raised $1.5 million from Y Combinator and others.

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PRIVATE EQUITY

- American Industrial Partners acquired the Sulfuric Acid Regeneration Business of Veolia North America, a Boston-Mass.-based environmental services company. Financial terms were not disclosed.

- BridgeTower Media, backed by Transom Capital, acquired Virginia Business, a Richmond, Va.-based business publication. Financial terms were not disclosed.

- Relation Insurance Services acquired H Group Benefits, a Northbrook, Ill.-based health insurance provider. Financial terms were not disclosed.

- Sequoia acquired Karpas Strategies, a Litchfield, Conn.-based investment manager. Financial terms were not disclosed.

- Valiantys, backed by Keensight Capital, acquired Contegix, a Sterling, Va.-based consultancy for Atlassian users. Financial terms were not disclosed.

EXITS

- Rand Logistics, a portfolio company of Duration Capital Partners, acquired Andrie, a Muskegon, Mich-based transporter of liquid bulk commodity goods, from Auxo Investment Partners. Financial terms were not disclosed.

OTHER

- Repligen Corporation has agreed to acquire Tantti Laboratory, a Taoyuan City, Taiwan-based biomaterials engineering company. Financial terms were not disclosed.

- Tuple Technologies acquired Digital Wrench, a Holbrook, N.Y.-based developer of anti-virus and remote monitoring computer technology. Financial terms were not disclosed.

FUNDS + FUNDS OF FUNDS

- Knox Lane, a San Francisco, Calif.-based investment firm, raised $1 billion for its second fund focused on businesses in the services and consumer sectors.

- Blue Delta Capital Partners, a Tysons, Va.-based venture capital firm, raised $250 million for their fourth fund focused on companies providing services to the U.S. federal government.

PEOPLE

- Monomoy Capital Partners, a Greenwich, Conn.-based private equity firm, promoted Renn Iaboni to managing director, head of origination.

- Initialized Capital, a San Francisco, Calif.-based seed-stage venture capital firm, promoted Livingston Miller to chief operating officer.