Deals

Site optimizer HubSpot raises $32M from Google, Salesforce and Sequoia Capital

HubSpot, an online marketing and content management suite, announced today that it has raised $32 million from Salesforce, Sequoia Capital and Google’s investing arm, Google Ventures, in its fourth round of funding.

The service “grades” websites and determines how often they will pop up in high spots on search engines — a process called search-engine optimization (SEO). The service also gives smaller- and mid-sized companies tools to quickly create and manage blogs and landing pages for their websites. The analytics part of the software gives companies a way to track the behavior of incoming and outgoing site visitors and tune the website to make them more likely to stay.

Salesforce in particular seems to be throwing around a lot of money lately — the company has made three acquisitions in the past couple of months. It dropped a whopping $212 million on Web-application developer Heroku in December, and then spent an undisclosed amount on email contact manager EtactsSalesforce also acquired Web-conferencing provider Dimdim for $31 million. The company’s cash reserves dropped more than 50 percent to $424 million, down from around $1 billion in January last year, according to a recent filing with the securities and exchange commission.

Google Ventures, which is a profit-driven investment arm rather than a strategic investment arm for the search giant, probably won’t be taking on any of HubSpot’s tools, said Rich Miner, partner with Google Ventures. But Google does want to offer HubSpot on the Google App Store, according to HubSpot co-founder Brian Halligan. Salesforce, on the other hand, will be working more closely with HubSpot to bring its services into Salesforce’s online customer relationship management (CRM) software.

HubSpot wasn’t planning on raising money in a fourth round but was convinced by Sequoia Capital’s general partner Jim Goetz to start another deal to become a part of Sequoia’s portfolio, Halligan said. Goetz will become a board observer with HubSpot but won’t be an official board member as part of the deal. Hallinger talked about going public the last time the company raised money in 2009, but those plans have apparently gone on the back burner.

“We think these guys can really help us make a dent in the universe,” Hallinger said. “In terms of going public, we’re too early.”

HubSpot has raised $65 million to date across four funding rounds. Its most recent round, worth $16 million, closed in October 2009. General Catalyst, Matrix Partners and Scale Venture Partners — all existing investors — also participated in the most recent fundraising round. The Cambridge, Mass.-based company was founded in 2006 and has more than 4,000 companies as customers. The company has 192 employees.

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