Brand Networks Inc. has increased its local workforce by 80 percent since the start of the year, with more growth likely because the company recently raised $68 million.
AEA Investors L.P., a New York City private equity firm, made the $68 million minority investment in the social marketing service provider, Brand Networks said last week. AEA has more than $6 billion in assets under its management with additional offices in Connecticut, London, Munich, Hong Kong and Shanghai.
As part of the investment deal, two partners from AEA will join Brand Networks' board.
The funding could extend an impressive stretch of growth for Brand Networks, which has its headquarters in Boston but the majority of its employees in Rochester. It also has offices in Toronto, Los Angeles and New York City.
Brand Networks has focused mainly on the development of Facebook applications for large national clients such as Starbucks Corp., AT&T Inc., American Express Co. and Paramount Pictures Corp. Because of the high-profile roster of clients, it has had triple-digit revenue growth annually since 2010.
CEO Jamie Tedford and Chief Technology Officer Mike Garsin founded Brand Networks in 2007. Garsin, a University of Rochester graduate, oversees the Rochester office.
In January, Brand Networks announced plans to add 75 jobs in Rochester and invest nearly $1.95 million to relocate from an office on South Avenue to a larger facility on Commercial Street in the High Falls area. The company moved in March.
Brand Networks began 2013 with 70 employees, including some 45 workers in Rochester. It now has roughly 135 employees in five offices, including 83 workers in Rochester.
Garsin said the investment from AEA will allow the company to add more jobs.
"I can't say specifically how many employees we might add right now," he said. "But this round of funding will help us increase our head count across the company, including Rochester."
George Conboy, president of Brighton Securities, said the $68 million and the relationship with AEA will go a long way in fueling future success and growth initiatives at Brand Networks.
"A relationship with a sophisticated investment source like AEA virtually always means more than just a bag of cash," Conboy said. "It means some advice and some arm's-length oversight.
"With the investment AEA has made, they will want to do everything they can to get a successful outcome. The extent of advice they can provide to a fast-growing company can help ensure Brand Networks has success."
Representatives from AEA were unavailable for comment.
Kurt Holstein, co-founder and former chief operating officer of New Jersey-based marketing agency Rosetta, who recently was appointed as an independent board member of AEA, said the firm spent more than a year looking for a social marketing platform to invest in. AEA chose Brand Networks for its combination of advanced software and client services, he said in a statement.
The investment from AEA is the first outside funding for Brand Networks.
"This is a huge moment for us," Garsin said. "We've bootstrapped from day one, but we came to a point where the market was ready for us to accelerate our growth. It's amazing to think about how far we've come and exciting to think about what's next for us."
AEA plans to provide even more capital, he said. The money will go toward product development, sales growth, possible acquisitions and expansion in Europe, Asia and Latin America.
Brand Networks has found itself on the cutting edge of a social media marketing industry that continues to grow. A recent study at the Duke University Fuqua School of Business found that companies spend 8.4 percent of their marketing budgets on social media.
Over the next year that share will increase to 11.5 percent, and in the next five years it will grow to nearly 22 percent, the study predicted. The study surveyed more than 450 chief marketing officers in the United States.
Examples of Brand Networks' social marketing work include custom Facebook applications such as the one the company created for the "The Tourist," a 2010 movie starring Angelina Jolie and Johnny Depp. Brand Networks created an app for Sony Pictures Entertainment Inc. that allowed Facebook users to create virtual tour books using their own Facebook photos.
For JetBlue Airways Corp., Brand Networks created an app allowing customers to earn special offers by checking into JetBlue Terminals on Facebook Places.
In recent months, Brand Networks has expanded its capabilities. This year the company announced the launch of its new social media analytics offering bn.insights. The application gathers data from social media platforms and tracks performance and return on investment for social ads, applications and pages.
Brand Networks was also one of the first companies to be awarded badges in all four Facebook Preferred Marketing Developers categories: apps, ads, pages and insights. Last week, Brand Networks launched its new Social Media Stack, a platform that enables marketers to manage content, ads and insights on Facebook, Twitter, blog website Tumblr and other social media platforms.
The launch is an indication that Brand Networks' social media offerings will go beyond Facebook.
"We cut our teeth with Facebook but are working with social networks including Tumblr and Twitter as they open up their platforms for marketing opportunities," Garsin said. "We're excited to track our growth and innovation as social marketing develops across the board."
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