Social media management platform Hootsuite announced Wednesday its acquisition of Sparkcentral, a customer engagement tool that enables one-on-one messaging via social channels. Financial terms of the deal were not disclosed.
Sparkcentral, based in New York and Belgium, has raised $37.6 million in funding since its founding in 2011, according to Crunchbase data. Its most recent investment was a $20 million venture round in 2016 led by Limburgse Reconversie Maatschappij.
The deal enables Hootsuite to tap Sparkcentral’s automated message distribution platform to connect all facets of the customer care workflow, which was traditionally telephone and email, Rich Hungerford, vice president of corporate development and strategy at Hootsuite, told Crunchbase News.
Hootsuite is already strong in digital marketing, but not as much on the customer service side, and more clients began asking for those capabilities, Hungerford said.
“The acquisition accelerates our roadmap in this space and leverages social channels to really harness activity,” he said. “Over the last year, the world changed and moved toward digital for customer service, so we wanted to do the deal. We liked the technology and people at Sparkcentral, who have great expertise.”
Sparkcentral is Canada-based Hootsuite’s 13th acquisition since being founded in 2008 and is its first since 2017, according to Crunchbase data. The company itself has just under $300 million in funding.
It is still early in the maturation of the digital customer service space, but there is a lot of growth happening, Hungerford said. He cited a Gartner survey claiming that by 2023 more than 40 percent of customer service will be automated.
“There is a massive market evolving in direct messaging and on the channels people are spending the most time on.” Hungerford added. “Sparkcentral is really a natural complement for what we do.”