VCJ Report: Analytics Add Up for VCs

As the latest funding of Buddy Media demonstrated earlier this month, VCs are placing their bets on social media analytics.

After all, they made a ton of money previously in the data analytics space. VCs first cashed in on enterprise analytics, with business intelligence companies like Hyperion Software and Business Objects selling for billions.

Next came Web analytics, which produced its own set of winners, such as Coremetrics and Ominture, the latter of which sold to Adobe Systems for $1.8 billion.

Today, VCs are entering the next logical frontier of social and mobile analytics.

Jordan Levy, a partner at Softbank Capital, knows it’s still early days for social analytics, so he doesn’t want to get too excited. A decade ago, when the Web analytics market was getting revved up, there were hundreds of competitors, many of them venture funded. But at the end of the day, there were only a few that mattered.

“I’m a believer that history repeats itself,” Levy tells Venture Capital Journal. “If this market shapes up like Web analytics, with companies getting acquired for $1.8 billion like Omniture, count me in right now.”

Softbank has made several bets on social analytics, including Buddy Media, which raised a $54 million round this month, bringing its total VC funding to $90 million. Softbank has also backed SocialFlow, which recently closed a $7 million Series A round. Investors included Softbank, RRE Ventures, AOL Ventures and others.

Stacey Curry Bishop (pictured), a partner at Scale Venture Partners, remembers how VCs previously got excited, mostly because her firm invested in one of the winners, Omniture. Today, Scale has returned to the analytics market with an investment in Vitrue, a social media analytics firm that scored $17 million in its latest venture round.

“You have lots of vendors coming into the market, but only a few that will emerge as premium companies, just like in the Web analytics market,” Bishop tells VCJ.

Bishop, Levy and other VCs, such as Anthony Lee of Altos Ventures and Sonja Hoel Perkins of Menlo Ventures, discussed the social media analytics market with VCJ in the August 2011 issue.

VCJ subscribers can read the full story here.

Not a VCJ subscriber? Click here for a free trial.

If you want to talk more about analytics or other hot trends, send an email to VCJ editor Alastair Goldfisher at alastair.goldfisher@thomsonreuters.com or contact him on Twitter at @agoldfisher.

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