Soci Raises $120M In Debt And Equity To Grow Its Marketing Management Platform
Soci (pronounced "soh-she"), a marketing automation platform whose clients include Ace Hardware, Jersey Mikes, Pet Supply Plus and Ford, announced today that it has raised $120 million in a funding round led by JMI Equity and Vertical Ventures dollars raised. Partners, Blossom Street Ventures and Renew Group Private Limited.
Afif Khoury, founder and CEO, said the new capital - a mix of debt and equity that Khoury would not have worked on - would be used for mergers and acquisitions, client success and international expansion. The SOC raised nearly $240 million.
"The pandemic has pushed consumers home and online, switched to digital channels and fundamentally changed the way consumers communicate and interact with brands," Khoury said in an email interview with TechCrunch. "SoCs have become a key partner for brands in this transformation, driving demand for brands to turn to technology to manage their presence in local digital marketing channels."
Launched in 2012 by Koury and Alo Sarv, the SoC platform was designed for companies with hundreds or thousands of employees that manage their marketing efforts across multiple channels. Soci provides clients with marketing-focused workflows, approval systems and processes, and analytics and management tools integrated with popular ad networks. It also provides a database to support marketing information, including search and social media data, ratings, polls, and chatbots.
“Companies with hundreds or thousands of websites must decide how to win the digital marketing war everywhere. This requires significant local awareness, data collection and visualization. It's a sophisticated tool and process to deploy those strategies across tens of thousands of digital websites.” Khoury said, “It's a tough task for any business and they might have a small army to manage without the right technology partners, but not this task getting done means missing out on real improvements that can lead to huge revenues.”
Khoury has a colorful background. A neuroscientist and attorney with a degree in genetics from UCSD and a law degree from Northwestern University, Khouri has worked as a geneticist, attorney and hedge fund manager.
According to Khoury, the reason for establishing Sochi was the lack of opportunities for brands to manage their presence on digital marketing channels. Along with Sarv and Rindsberg, Corey spent two years before launching the product in a limited testing period.
"Between search, social, review and advertising networks, a brand can have 20 to 25 digital marketing pages where customers can search for, think about, rate and otherwise interact with the brand," Khouri said. “However [a few years ago] there was a new trend where brand users connect to local digital marketing pages instead of national digital marketing pages. That means a brand has to manage 5,000 websites and 25 digital marketing pages. National Pages have to suddenly managing 125,000 digital marketing pages.
According to Corey, the pandemic has normalized the idea that businesses maintain a local yet digital presence and adapt to customers from different geographies and demographics. According to a study by marketing startup Uberell, customer retention with local businesses increased by more than 11% between 2020 and 2019, while website and phone conversions increased by more than 35% over the same period.
One way SoCs can help demystify these sites and channels is through artificial intelligence, according to Khoury. That year, Soci began rolling out Genius, a service layer that analyzes local data on behalf of brands and provides recommendations and feedback to automate brands' marketing strategies.
For example, Soci Review Genius — powered by the AI startup's OpenAI technology — collects reviews and analytics through review networks (like Yelp) and automatically responds to those reviews. Judging by recent examples of wild AI (see: Bing Chat), this isn't necessarily the best approach. But Khouri says Review Genius' automated responses require human verification before publishing, adding that Soci conducts "extensive testing and sampling" to fine-tune its security and AI measures.
“The SOC's AI models are used for information and automation,” explained Khoury. On the data front, Soci receives input from dozens of marketing channels in hundreds of locations. The Soci team developed models to analyze the data and correlate it with outcomes such as customer retention, foot traffic, calls, clicks and other customer lines Loyalty data and money received: Implemented community-specific compliance features and other processes such as approvals to ensure that terms and phrases are never used and referred to.
Maybe there's some truth to that. But even the best filtering systems for AI text generation can let toxicity and bias slip through.
These risks don't seem to dampen their customers' enthusiasm for the SoC platform. The startup recently reported 149 percent year-over-year revenue growth and a customer base of more than 700 companies across multiple industries, including food and beverage, retail, automotive, telecom, grocery, health and fitness, beauty, financial services and insurance.
Perhaps it was the marketing challenges the companies still faced that helped the company and perhaps made the social platform more attractive to competitors like Sprout Social and Sprinkler. In a recent HubSpot survey of marketers, 19% said traffic and lead generation remain the top barriers, followed by talent recruitment and marketing strategy positions.
Khouri expressed a "strong endorsement" of Sochi's current growth trajectory by reviving the investment group that owns 5 Hours International Energy. "From the impact of Covid-19 on domestic sales to the recent downturn, brands are evaluating their budgets and marketing more carefully than in previous years," he added. "Thus, Soci has shown very high growth in this period."
As for expansion plans, Soci -- which is making its first acquisitions -- aims to increase its workforce by 10% to 20% this year to around 600 employees "in preparation for the next phase." It may not be an IPO, but Khouri isn't squashing the idea, at least not any time soon.
"Despite the challenging economic environment, Soci continues to grow, innovate and create value," said Khoury. "With a record year of revenue growth, we are confident in its ability to continue to grow as we have demonstrated over the past several years."
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